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Problem$2$

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Lavender Company sells inventory for $$40,000.$ The adjusted basis of the property is $$58,000$ at the time of the sale, and the inventory has been held more than one year. Lavender Company has:

a$.$ No gain or loss.

b$.$ An ordinary loss.

c$.$ Sold a long$-$term capital asset.

d$.$ A long$-$term capital loss.

e$.$ Sold a short$-$term capital asset.