Question

Joe Hall owns a limousine for use in his personal service business of transporting passengers to airports. The limousine's adjusted basis is $40,000. In addition, Hall owns his personal residence and furnishings, that together cost him $280,000. Hall's capital assets amount to
a) $320,000
b) $280,000
c) $40,000
d) $0

Answer 1

Answer:

The answer is B $280,000

Explanation:

capital assets includes investment property and property held for personal use (e.g., personal residence and furnishings), but excludes property used in a trade or business (e.g., limousine).

Therefore the capital assets for Joe Hall is $280,000 which is his personal residence and furnishings excluding his limousine which is for business use