Question
In December 2016, Emy was lucky enough to be in the audience of the Ellen show when everyone in the audience was given a brand
In December 2016, Emy was lucky enough to be in the audience of the Ellen show when everyone in the audience was given a brand new car worth $24,000 retail value. Emy uses public transportation because she thinks all other drivers are crazy people, so she does not need the car but accepts it anyway. She gives it to her friend Art who does drive but already has two cars. Art then sells the car for $22,000 in cash on December 20, 2016, and splits the proceeds with Emy. How much taxable income do Emy and Art each have from the car transactions?
$11,000 and $11,000
$24,000 and $22,000
$0 and $22,000
$24,000 and $0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started