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ziro4ka [17]
3 years ago
15

Oscar owns a building that is destroyed in a hurricane. His adjusted basis in the building before the hurricane is $130,000. His

insurance company pays him $140,000 and he immediately invests in a new building at a cost of $142,000. What is Oscar's basis on his new building?
Business
1 answer:
Alinara [238K]3 years ago
3 0

Answer: $132,000

Explanation:

Oscar's new basis on the building will be the basis of the old building plus any additional investment he added.

This is the because there is no gain on the $140,000 he received because it was an Involuntary Conversion amount and he reinvested it into another building within a period of 2 years.

As there is no gain, the building will retain it's original basis but will add any amount outside the involuntary replacement cost of the building.

The Additional basis will be,

= Cost of building - Insurance

= 142,000 - 140,000

= $2,000

The Basis for the new building is,

= 130,000 + 2,000

= $132,000

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Answer:

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7 0
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Jane Spring maintained this record of vehicle expenses for last year: gas, $845.96; oil, lube, miscellaneous, $68.85; insurance,
allochka39001 [22]

Answer:

Depreciation: $4,000.00

Variable costs : $914.81  

Explanation:

The value of the car when new = $19,860.00

Values after two years =$11,860.00

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Variable costs are the cost that changes with usages. In this case, variable costs are gas and oil, lube, and miscellaneous.

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Variable costs =  $914.81    

 

7 0
3 years ago
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