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Anna35 [415]
3 years ago
7

Mary traded furniture used in her business to a furniture dealer for some new furniture. Mary originally purchased the furniture

for $45,000 and it had an adjusted basis of $20,000 at the time of the exchange. The new furniture had a fair market value of $40,000. Mary also gave $4,000 to the dealer in the transaction.
What is Mary's adjusted basis in the new furniture after this transaction?
Business
1 answer:
likoan [24]3 years ago
8 0

Answer:

$24,000

Explanation:

From the time an asset is acquired until the time it is sold, an asset experiences a number of events which causes an increase or decrease of its total value. Th adjusted basis of a given asset, takes the base price of an asset and adjusts it for changes in value reflecting enhancements and or depreciation. For instance, a given asset purchased for $100, depreciates by $10 and has an improvement of $60 would have an adjusted basis of $100 - $10 + $60 = $150.

Now when Mary bought her furniture, the adjusted basis was $20,000. At the time of exchange, the fair market value of the furniture is $4,000 whereas Mary also gave $4,000 to the dealer in the transaction. This $4,000 changes the value ans is added to the previous adjusted basis of $20,000.

Mary's adjusted basis in the new furniture after the exchange is:

= $4,000 + $20,000

= $24,000

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Please see below

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Complete question:

Assume that the Texas legislature is not in session and the economy has gone into recession. What must occur before legislators can act to reformulate policy

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The legislature must wait for a special session to be called.

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