Theresa owns a boat that is held for personal use and has a $100,000 basis. The boat is destroyed by a storm and Theresa collects $120,000 from the insurance company. She purchases a new $150,000 boat for personal use and elects to defer any gain on the transaction. What is the basis of the new boat?
What will be an ideal response?
Theresa's realized gain is $20,000 ($120,000 - $100,000) which she has elected to defer. The deferred gain reduces the basis of the new boat. The new boat's basis is $130,000 ($150,000 - $20,000).
You might also like to view...
Effective report writers use ________ to introduce sections that include important or complex topics and ________ to help readers absorb the information they just read
A) foresight; reflection B) inclusive ideas; deductive reasoning C) hedging sections; forecasting sections D) informational taglines; summary statements E) preview sections; review sections
Being able to prioritize our workload helps us to make better decisions and prevents us from having which barrier of communication?
a. Emotions b. Information overload c. Differing perceptions d. Filtering
A service culture comprises the things that make a business distinctive and make the people who work there proud to do so.
Answer the following statement true (T) or false (F)
The current indirect exchange rate is 12 pesos per dollar. The anticipated annual inflation rate is 6% in the United States and 14% in Mexico
If the cash inflow in pesos is 50,000 in one year, what are the 50,000 pesos worth in U.S. dollars after conversion from pesos to dollars using the forward exchange rate? A) $3,480.78 B) $3,874.27 C) $3,882.13 D) $3,983.78