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 Topic: Sample Test qt - No 3 ( Topic Closed)
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koklu
Newbie
Joined: 08 Apr 2011
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Posts: 15
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| Posted: 21 Oct 2011 at 12:35 | IP Logged
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Guys,
Leker exchanged a van that was used exclusively for business and which had an adjusted tax basis of $20,000 for a new van. The new van had a fair market value of $10,000, and Leker also received $3,000 in cash. What was Leker's tax basis in the acquired van?
$20,000
$17,000
$13,000
$7,000
Ans:- 17000 .
I thought it should have been $13000. Can someone help explain this to me ?
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brsk
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| Posted: 23 Oct 2011 at 21:19 | IP Logged
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basis of new van &nb sp;$20,000
add: boot (cash)received $ 3,000
_________
$23,000
less: FMV of new van $10,000
_________
Tax basis of van &nb sp;$13,0000
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CPA#1
Major Contributor
Joined: 01 Dec 2009
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| Posted: 08 Nov 2011 at 12:21 | IP Logged
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Old Basis $20,000
+Boot paid 0
+ Gain Recognized 0
- Boot Received 3,000
==================
= New Basis $17,000
$17,000 is the correct answer, not $13,000
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