Barbella purchased a wedding ring for $15 at a yard sale in May. She thought the ring was costume jewelry, but it turned out to be a real diamond ring. She is not in the business of buying and selling anything. She researched the ring on the internet and discovered that it was worth at least $1,000. She sold it on an internet auction site for $1,100 in July. Was the ring a capital asset

Answer:

a. Yes, the ring is a capital asset.

b-1. The amount the gain from its sale by Barbella is $1,085.

b-2. Since the ring was held by Barbella for less than a year, the nature of the gain is therefore a short term capital gain.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Barbella purchased a wedding ring for $15 at a yard sale in May. She thought the ring was costume jewelry, but it turned out to be a real diamond ring. She is not in the business of buying and selling anything. She researched the ring on the Internet and discovered that it was worth at least $1,000. She sold it on an Internet auction site for $1,100 in July.

a. Was the ring a capital asset?

b. What were the amount and nature of the gain or loss from its sale by Barbella?

Explanation of the answers is now given as follows:

a. Was the ring a capital asset?

Yes, the ring is a capital asset.

Despite that Barbella purchased the wedding ring for personal use, the ring still has to be treated as a capital that it is actually is.

b. What were the amount and nature of the gain or loss from its sale by Barbella?

b-1. The amount of the capital gain can be calculated as follows:

Capital gain = Sales proceed - Cost of purchase = $1,100 - $15 = $1,085

Therefore, the amount the gain from its sale by Barbella is $1,085.

b-2. Since the ring was held by Barbella for less than a year, the nature of the gain is therefore a short term capital gain.

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o external formal communication
o external informal communication
O internal formal communication
O internal informal communication
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Date Transaction Number
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Cost
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Mar. 10 Purchase 570 7.73
Mar. 16 Purchase 710 8.20
Mar. 23 Purchase 520 8.60

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QUESTION 16
You are a school photographer taking individual and class pictures for 2 classes of 21 students each. On average, each individual picture
takes 3 minutes and a class picture takes 10 minutes. About how long should it take you to get all of the pictures?
O A 1 hour 3 minutes
OB. 1 hour 13 minutes
OC. 2 hours 6 minutes
OD. 2 hours 16 minutes
OE 2 hours 26 minutes

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Selling and administrative costs
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The
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