Question

A business taxpayer sells inventory for $80,000. The adjusted basis of the property is $58,000 at the time of the sale and the inventory had been held more than one year. The taxpayer has:______

a. No gain or loss.
b. Sold a long-term capital asset.
c. Sold a short-term capital asset.
d. An ordinary gain.
e. None of the above.

Answer 1

d. An ordinary gain.

Step-by-step explanation:

The business taxpayer sells inventory for $80,000. The adjusted basis of property is $58,000 at the time of the sale and the inventory had been held more than one year. The taxpayer has an ordinary gain. Inventory (stock in trade) is classified as an ordinary Asset; and it will be reported as an ordinary gain.