Which of the following statements are correct? (1.) A sale is generally a transfer of property for money only or for a promise to pay money. (2.) An exchange is a transfer of property in return for other property or services.
(3)) Recognized gain is always the excess of the amount realized over the adjusted basis of the property. (4.) Realized loss is always the excess of the adjusted basis of the property over the amount realized.
(5)) fte adjusted basis of the property is always the original cost adjusted for such items as casualty losses, improvements, and depreciation.e.g., in the case of inherited property or property received by gift.
A) 1, 2, and 3
B) 1, 2, and 4
C) 1, 3, and 4
D) 1, 4, and 5
E) 2, 3, and 4

Question

Quizplus · Accepted Answer

Statements 1, 2, and 4 are correct. Statement 3 is not correct because it is deﬁning realized gain rather than recognized gain, and all realized gain is not recognized
 Statement 5 is not correct because cost is not always the starting point in ﬁguring basis,

Which of the Following Statements Are Correct? (1