Question
In: Accounting
14. Sailing" is the name of a small sculpture created by an artist, Tessa.The owner of...
14. Sailing" is the name of a small sculpture created by an artist, Tessa.The owner of the sculpture sold the sculpture and recognized a gain of $45,000. Which of the following statements is false?
A.If an art gallery is the seller, the gain is ordinary
B.If a private collector is the seller, the gain is capital gain.
C. If Tessa is the seller, the gain is ordinary income.
D.None of the other answers is false
Solutions
Expert Solution
Which of the following statements is false?
Answer:- C. If Tessa is the seller, the gain is ordinary income.
Explanation:-
An art gallery is one of the types of dealers. Art dealers are taxed in the same way as any other retail operation. As such all income including income from the sale of art is taxed as ordinary income (IRC §§ 61, 64).
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