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
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