Virgil was leasing an apartment from Mauve,Inc.Mauve paid Virgil $1,000 to cancel his lease and move out so that Mauve could demolish the building.As a result:

Question

Quizplus · Accepted Answer

Since Virgil received $1,000 for canceling his lease and moving out, he has a $1,000 capital gain. A capital gain is the profit earned from the sale or exchange of a capital asset, and in this case, Virgil received $1,000 for giving up his lease, which is considered a capital asset. Therefore, choice A is the correct answer. Choices B, C, D, and E are incorrect because none of them accurately reflect the transaction described in the scenario.

Virgil Was Leasing an Apartment from Mauve,Inc