Several years ago, Y&S Inc. purchased a patent on a production process for $250,000 and has amortized $91,000 of the cost. Y&S has learned that a rival company recently developed a new process that renders the patent worthless. Consequently, Y&S made a public announcement that it would no longer enforce the patent. What is the tax consequence to Y&S of this unfortunate situation?
A. $159,000 Section 1231 loss.
B. $159,000 ordinary abandonment loss.
C. $159,000 capital loss.
D. Y&S has no tax consequences because it did not sell or exchange the patent.
Answer: B
You might also like to view...
Data Flow Diagrams start with a circle indicating the start event.
Answer the following statement true (T) or false (F)
What are the major differences between variable and absorption costing?
As the new HR manager, John knew he immediately wants to have the employee handbook translated into the top three languages used by the employees. Yes, English was the primary language for most, but three other languages were utilized by company employees. This is an example of which challenge?
A. challenge of information management B. challenge of consistency C. challenge of loyalty D. challenge of privilege
Expected customer services are generally offered _____
a. to all customers b. free-of-charge c. at a fee which enables the retailer to break even d. at a fee which enables the retailer to earn a fair profit over the cost of the service