What is the adjusted basis in the home?

Guthrie purchased his home for $300,000. As a sole proprietor, he operates a certified public accounting practice in his home. For this business, he uses one room exclusively and regularly as a home office. In Year 1, $1,450 of depreciation expense on the home office was deducted on his income tax return. In Year 2, Guthrie sustained losses in his business; therefore, no depreciation was taken on the home office. Had he been allowed to deduct depreciation expense, his depreciation expense would have been $1,700. What is the adjusted basis in the home? a. $295,000. b. $296,850. c. $298,550. d. $300,000. e. None of the above.

What is Lolita's cost basis in each asset?

Lolita purchases a business for $650,000. The fair market value of the assets of the business is as follows: Equipment $ 350,000 Building 250,000 What is Lolita's cost basis in each asset? a. $350,000 equipment, $250,000 building, $0 goodwill. b. $379,167 equipment, $270,833 building, $50,000 goodwill. c. $350,000 equipment, $250,000 building, $50,000 goodwill. d. $379,167 equipment, $270,833 building, $0 goodwill. e. None of the above.

Garnet, Inc., owns a delivery truck which initially cost $30,000. After depreciation of $15,000 had been deducted, the truck was traded-in on a new truck that cost $40,000. Garnet was required to pay the car dealer $20,000 in cash. What is Garnet’s basis for the new truck?

Garnet, Inc., owns a delivery truck which initially cost $30,000. After depreciation of $15,000 had been deducted, the truck was traded-in on a new truck that cost $40,000. Garnet was required to pay the car dealer $20,000 in cash. What is Garnet’s basis for the new truck? a. $0. b. $35,000. c. $40,000. d. $45,000. e. None of the above.

Paul exchanges a business machine, which has an adjusted basis of $50,000, for a new machine worth $40,000. In addition, he receives cash of $20,000. What is the recognized gain or loss and the basis of the new machine?

Paul exchanges a business machine, which has an adjusted basis of $50,000, for a new machine worth $40,000. In addition, he receives cash of $20,000. What is the recognized gain or loss and the basis of the new machine? a. $0 and $30,000. b. $0 and $40,000. c. $10,000 and $40,000. d. $10,000 and $50,000. e. None of the above.

What is the recognized gain or loss?

Manuel exchanges a rental house at the beach with an adjusted basis of $150,000 and a fair market value of $125,000 for a rental house at the mountains with a fair market value of $100,000 and cash of $25,000. What is the recognized gain or loss? a. $0. b. $100,000. c. $25,000. d. ($25,000). e. None of the above.