Al Eng owns 50% of the outstanding stock of Rego Corp. During 2015, Rego sold a trailer to Eng for $10,000, the trailer's fair value. The trailer had an adjusted tax basis of $12,000, and had been owned by Rego and used in its business for Three years. In its 2015 income tax return, what is the allowable loss that Rego can claim on the sale of this trailer?
a. $0
b. $2,000 capital loss
c. $2,000 section 1231 loss.
d. $2,000 Section 1245 loss.
Answer: C
Tax
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- Income in respect of a cash-basis decedent
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