Pettit Company purchased heavy equipment by giving the seller a $30,000 cash down payment and a 5-year interest-bearing note for the $170,000 balance of the price. Compute Pettit's book basis and tax basis in the equipment.
A. Book basis $200,000; tax basis $30,000
B. Book and tax basis $200,000
C. Book and tax basis $30,000
D. Book basis $30,000; tax basis $170,000
Answer: B
You might also like to view...
The articles of partnership for Paxton-Robson Partnership provide for a salary allowance of $5,000 per month for partner Robson, with the balance of net income to be divided equally. If Robson made an additional investment of $10,000 during the year and withdrew $4,000 per month, and net income for the year was $80,000, by what amount did Robson's capital increase during the year?
A) $80,000 B) $12,000 C) $60,000 D) $32,000
The measure of damages in contracts cases is
A) The cost to the injured party of the consequences of a breach. B) Reasonable foreseeability C) Only those damages which are not considered too remote. D) Those losses that happen in the normal course of business. E) Both B and C
Co-ownership of the means or instrumentality of accomplishing a single business transaction or a limited series of transactions ordinarily results in a:
A) partnership. B) joint venture. C) corporation. D) R & D partnership.
The services that insurance companies provide should not be a factor in selecting a life insurance company
Indicate whether the statement is true or false.