Jack Jones has the following casualty gains and losses in 2016: (a) gain on the destruction by fire of hardware store--$10,000; (b) loss on destruction by hurricane of residential rental property--$15,000; and (c) loss on theft of diamonds purchased for investment--$5,000. All of the assets were held for more than one year. Sam should report: 1) $10,000 net Section 1231 loss. 2) $10,000 ordinary gain and $20,000 itemized deduction. O3) $10,000 ordinary loss. 4) $15,000 ordinary loss. 5) $5,000 ordinary loss and $5,000 itemized deduction. Question 16 (5.25 points) Listen Which of the following is a capital asset? 1) Property held primarily for sale to customers 2) Accounts or notes receivable acquired in the ordinary course of business 3) Machinery and equipment used in a trade or business 4) Temporary investment of idle business cash in marketable corporate securities 5) Real property used in a trade or business Question 19 (5.25 points) Listen During 2016, Judy Jenkins sold Section 1250 nonresidential real property for $30,000. She had purchased the property in 1980 at a cost of $100,000. Judy had properly claimed depreciation totaling $80,000, of which $20,000 was additional (excess) depreciation. What is the amount of Judy's ordinary income? 1) $0 2) $10,000 3) $20,000 O4) $80,000 5) None of these Question 20 (5.25 points) 4 Listen Karen Kirbey grants Pamela Prentiss a franchise to sell handcrafted gifts. Pamela pays Karen 15 percent of all revenue. Sales were $550,000. How will Pamela treat this payment on her tax return? O1) $82,500 short-term capital loss O2) $82,500 long-term capital loss O3) $82,500 nonbusiness deduction O4) $82,500 business expense deduction