The following assets in Jack's business were sold in 2017:

The office equipment had a zero adjusted basis and was purchased for $8,000.The automobile was purchased for $2,000 and sold for $1,200.The ABC stock was purchased for $1,800 and sold for $3,200.In 2017 (the year of sale),Jack should report what amount of net capital gain and net ordinary income?

Question

The following assets in Jack's business were sold in 2017:
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The office equipment had a zero adjusted basis and was purchased for $8,000.The automobile was purchased for $2,000 and sold for $1,200.The ABC stock was purchased for $1,800 and sold for $3,200.In 2017 (the year of sale),Jack should report what amount of net capital gain and net ordinary income?

Quizplus · Accepted Answer

- Office equipment: zero adjusted basis and sold for $8,000, results in $8,000 ordinary gain.
- Automobile: purchased for $2,000, sold for $1,200, results in ($800) capital loss.
- ABC stock: purchased for $1,800, sold for $3,200, results in $1,400 capital gain.
Net capital gain is ($800 + $1,400) = $600.
Net ordinary income is $8,000.
Therefore, the answer is (C) $1,400 LTCG and $300 ordinary gain.

The Following Assets in Jack's Business Were Sold in 2017