Answer :
Susan purchased a 2018 Toyota Camry on 3/1/2019 for $15,000. She sold it on 6/1/2021 for $15,000 after depreciating it by $500. She sold no other assets during the year. Susan recognizes $500- ordinary income.
This statement is True. Susan has sold her Toyota Camry at the same price at which she bought, after taking a depreciation of $500 which means the selling price was actually $500 more than the value at which it was being sold, thus the depreciation is recognized as ordinary income. The term "ordinary income" refers to regular income, which is typically received from an employer, self-employment earnings, or investments.
Ordinary income is typically taxed at a higher rate than other types of income, such as capital gains. Hence, the given statement is true. Other statements: Helen's records for the current year contain the following information: - She donated IBM stock that she purchased 5 years ago for $3,000 when it had an FMV of $5000 to the American Lung Association.
What is the amount of his charitable contribution deduction? The amount of his charitable contribution deduction is $11,500. The total amount of the contribution made by Helen is $3,000 (stock) + $7,500 (cash) + $1,000 (HOA payment) = $11,500. Shira is single and 48 years old. She contributed $10,000 to a traditional IRA plan. The balance of the account before the distribution was $20,000. She distributed $5,000 this year for a first-time home purchase. Shira's only income this year was from salary or $20,000. Assume Shira is in the 22% bracket. Shira's tax on the distribution is $1100 ($5000 x .22), but there is no 10% penalty. The statement is True.
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