Question

To calculate a gain or loss on the sale of an asset, the proceeds from the sale are reduced by which of the following?

A. Tax basis of the property
B. Selling expenses
C. Amount realized
D. Tax basis of the property and selling expenses
E. All of these

Answer 1

The gain or loss on the sale of an asset is calculated by reducing the proceeds from the sale by the tax basis of the property and selling expenses, making the correct answer E. All of these.

Step-by-step explanation:

The correct answer is E. All of these. To calculate the gain or loss on the sale of an asset, the proceeds from the sale are reduced by both the tax basis of the property and the selling expenses. The amount realized, which is the total cash received from the sale, is also considered in the calculation. Therefore, all of these factors must be taken into account when determining the gain or loss on the sale of an asset.