- This topic has 1 reply, 2 voices, and was last updated 7 years, 6 months ago by .
-
Topic
-
Can someone help elaborate on the Q/A below?
******************************************************************************************
Question:
Capital assets include:
A)a corporation’s accounts receivable from the sale of its inventory.
B)7-year MACRS property used in a corporation’s trade or business.
C)a manufacturing company’s investment in U.S. Treasury bonds.
D)a corporate real estate developer’s unimproved land that is to be subdivided to build homes, which will be sold to customers.Answer C.
Note: IRC Section 1221 explains what a capital asset does not include. For example, it does not include: inventory, any depreciable property,a copyright, a literary, musical, or artistic composition, or accounts or notes receivable acquired in the ordinary course of trade or business for services.
************************************************************************************************I’m confused because I always thought that capital assets include depreciable property (like PP&E). I’ve spent time working in manufacturing accounting and our capital assets include equipment, buildings, and the like, and we would capitalize & depreciate accordingly. Therefore my first guess would have been B.
What am I missing here??
**************************
AUD: 77 (Jan 2016)
BEC: 80 (May 2016)
REG: (rematch May 2017)
FAR: (rematch Apr 2017)
**************************----------
AUD - 74, 77! (1/2016)
BEC - 80! (5/2016)
REG - tbd (8/2016)
FAR - tbdStudy materials: NINJA MCQ/Audio/Notes
"I can do ALL things through Christ who strengthens me!"
----------
- You must be logged in to reply to this topic.