Lourdes,a sole proprietor,collected $8,650 on November 21,2016 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2016?
A) a short-term loss as the FMV is greater than the payments received on the receivables.
B) a short-term gain as the payments are from receivables that are always considered short-term.
C) no gain or loss as the payments are within the normal course of business.
D) an ordinary gain because the receivables had a FMV greater than the basis of the receivables.
Correct Answer:
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