Unit 9. Disposition of Business Assets

Question 1

Related party dispositions

Answer 1

no deductions allowed for losses but if the related party then sells the property to unrelated party that loss will be allowed to reduce her own gain on the sale

Also gains and losses cannot be netted. Gains are taxable and losses are not.

Question 2

Form for gains or losses on dispositions of business assets

Answer 2

Form 4797

Question 3

What is capital Assets?

Answer 3

personal-use assets
collectibles (not for professional dealer of collectibles)
stocks and other investment properties

Question 4

Noncapital assets

Answer 4

assets that are used in trade or business:
- inventory
- depreciable property
- real property used in business
- self-produced copyrights, manuscripts, drawings, photographs
-accounts receivables
-stock and bond held by professional dealers
-collectibles held by professional dealers
business supplies

Question 5

Section 1231, 1245 and 1250