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8) A taxpayer cannot recognize a taxable gain on sale of an asset if the selling...

8) A taxpayer cannot recognize a taxable gain on sale of an asset if the selling price is less than the amount the taxpayer originally paid for the asset.

True

False

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Answer #1

This statement is FALSE.

At the time of the sale of the asset, the selling price of the asset is compared to the asset's carrying value by the taxpayer. The asset's carrying value is the cost of the asset minus the accumulated depreciation on the asset as on the date of the sale of the asset. If the Selling price of the asset is greater than the asset's carrying value, taxpayer would recognize a gain on the sale of the asset and vice versa. Hence, the above statement is not true.

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