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P2-U09 · PART 2 · SOURCE CYCLE 2026-2027
Disposition of Business Assets
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here.
Q1.Alder holds goods primarily for sale to customers in the ordinary course of business. How are they classified for the cited disposition rule?
As noncapital assets
Q2.Alder transfers depreciable business property for $20,000 with a $10,000 adjusted basis. The resulting $10,000 taxable gain is depreciation recapture. How is it reported?
As ordinary income from depreciation
Q3.Alder makes a qualifying installment sale. When may gain generally be reported?
As payments or payment-equivalent debt relief are received
Q4.For a qualifying like-kind analysis, how may exchanged properties differ while remaining like kind?
They may differ in grade or quality but must be of the same nature or character