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What is the amount and character of the taxpayer gain

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Reference no: EM132608560

Question - A taxpayer purchased a bond denominated in GBP for GBP150,000 when 1 Pound Sterling = USD1.30. Taxpayer sells the bond for GBP175,000 at a point when 1 pound Sterling = USD1.25. 

What is the amount and character of the taxpayer's gain or loss?

a. $23,750 ordinary gain

b. $23,750 capital loss

c. $23,750 capital gain

d. $7,500 ordinary gain & $32,500 capital gain

Reference no: EM132608560

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