Elise sells a painting that has a fair market value of $9,000 to Jon for $6,000. Which of the following statements about the tax effect of the sale is/are correct?
I.If Jon is an employee of Elise's, no income is recognized from the sale.
II.If Jon is Elise's brother, Jon does not recognize any income from the sale.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Elise sells a painting that has a fair market value of $9,000 to Jon for $6,000. Which of the following statements about the tax effect of the sale is/are correct?
I.If Jon is an employee of Elise's, no income is recognized from the sale.
II.If Jon is Elise's brother, Jon does not recognize any income from the sale.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

The Answer of Elise sells a painting that has a fair market value of $9,000 to Jon for $6,000. Which of the following statements about the tax effect of the sale is/are correct?
I.If Jon is an employee of Elise's, no income is recognized from the sale.
II.If Jon is Elise's brother, Jon does not recognize any income from the sale.
​
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Elise Sells a Painting That Has a Fair Market Value