Suppose that you purchased a machine several years ago for your company.You recently sold the machine for more than you paid.This is an example of a
A)capital carry-forward.
B)non-taxable gain.
C)capital gain.
D)windfall.
E)none of the above.

Question

Quizplus · Accepted Answer

Selling the machine for more than what was paid for it results in a capital gain, which is a taxable event. A capital carry-forward refers to carrying forward a capital loss to offset future capital gains. A non-taxable gain may occur in certain circumstances, such as the sale of a personal residence under certain conditions. Windfall refers to a sudden, unexpected financial gain.

Suppose That You Purchased a Machine Several Years Ago for Your