Question

1. The tax rate upon disposition of an asset could differ based on the type of gain or loss the asset held. These types include:

1. Transactional gains and losses, Capital gains and losses, Section 1231 gains and losses, and Personal use gains and losses
2. Ordinary gains and losses, Capital gains and losses, Section 1231 gains and losses, and Personal use gains and losses
3. Ordinary gains and losses, Transactional gains and losses, Section 1231 gains and losses, and Personal use gains and losses
4. None of the above

Answer 1

When a asset is disposed it has various consequences and TAX rate varies depending on the type of asser it include determination related to-

a) Whether asset was used for business purpose and if disposed factors like Ordinary gains and losses, capital gains and losses and Sec 1231 gain and losses would have to be evaluated.

b) If the Asset was used for Personal use then factors like Capital gains and losses and Sec 1231 gain and losses would have to be evaluated.

Hence Option B above is correct, ie

The tax rate upon disposition of an asset could differ based on the type of gain or loss the asset held. These types include: b. Ordinary gains and losses, Capital gains and losses, Section 1231 gains and losses, and Personal use gains and losses