Question

which of the following would not describe the tax treatment on the disposal of depreciable property? question 7select one: a. if, at the end of a fiscal year, the balance of a pool is negative, the balance would be added to business income. b. if, at the end of the taxation year, all assets in a class have been disposed of, but a balance remains in the pool, the balance would be deductible from business income. c. if the selling price exceeds the original cost of the property sold, a capital gain would be recognized. d. if the original cost exceeds the selling price of the property sold, a capital loss would be recognized.

Answer 1

The tax treatment on the disposal of depreciable property is such that if the original cost exceeds the selling price, a capital loss would be recognized.

Step-by-step explanation:

The correct answer is option d. If the original cost exceeds the selling price of the property sold, a capital loss would be recognized.

When depreciable property is sold, the difference between the original cost and the selling price is considered a capital gain or loss.

If the selling price exceeds the original cost, a capital gain would be recognized. However, if the original cost exceeds the selling price, a capital loss would be recognized.