Question

Only answer number 4. thanks,

T-4. Which of the following sections is the controlling section with respect to the result in question 5?

a. Code Section 1001(a)

b. Code Section 165(a)

c. Code Section 165(c)

d. Code Section 1211(b)

5. On June 10, 2019 Jessica sold her personal use automobile for $20,000. She purchased the car two years earlier for $17,000. The car increased in value due to its excellent mileage and safe design. How much is Jessica’s recognized gain or loss?

Answer to Number 5 is  $3,000 gain

  

  

Answer 1

Answer to Question 4 is "A" : Code Section 1001(a)

Code Section 1001(a) states that the gain from sale or disposition of property shall be excess of amount realized over the adjusted basis provided in Section 1011. Similarly in case 5, amount realized is 20,000$ and adjusted basis is 17,000$ and hence gain is 3,000$ in accordance with Section 1001(a).