1. Joseph runs his own hardware business, but he is also heavily into personal investments and collections. Which of the following items is one of Josephs noncapital assets?

a) Inventory

b) Stocks or bonds

c) Automobiles

d) Artwork

2. John has stock in TSU Company, which became worthless during the tax year. On what date is the stock treated as though it was sold?

a) December 31, 2019

b) January 1, 2019

c) The date the stock became worthless

d) The date the taxpayer decided to declare the stock worthless

3. Ginnies husband passed away last year and she must handle the tax return herself this year. She needs to identify which of her assets are capital assets. Which of the following would not be included in her list of capital assets?

a) Stocks

b) Bonds

c) Machinery

d) Inventory

4. Martin Phillips, a salesman, sold his automobile for $1,400. He had used the automobile for business 60% of the time. His original purchase price was $5,400 and he had deducted $2,000 in depreciation by the time it was sold. Compute his taxable gain or loss on this transaction.

a) $ 400 loss

b) $ 0

c) $2,000 loss

d) $1,400 gain