Mona purchased a business from Judah for $1,000,000.Judah's records and an appraiser provided her with the following information regarding the assets purchased:
Adjusted Basis
FMV
Land
$195,000
$270,000
Building
310,000
450,000
Equipment
95,000
180,000

What is Mona's adjusted basis for the land,building,and equipment?
A)Land $270,000,building $450,000,equipment $180,000.
B)Land $195,000,building $575,000,equipment $230,000.
C)Land $195,000,building $310,000,equipment $95,000.
D)Land $270,000,building $521,429,equipment $208,571.
E)None of the above.

Question

Mona purchased a business from Judah for $1,000,000.Judah's records and an appraiser provided her with the following information regarding the assets purchased:
Adjusted Basis
FMV
Land
$195,000
$270,000
Building
310,000
450,000
Equipment
95,000
180,000
​
What is Mona's adjusted basis for the land,building,and equipment?
A)Land $270,000,building $450,000,equipment $180,000.
B)Land $195,000,building $575,000,equipment $230,000.
C)Land $195,000,building $310,000,equipment $95,000.
D)Land $270,000,building $521,429,equipment $208,571.
E)None of the above.

Quizplus · Accepted Answer

Mona's adjusted basis for the land, building, and equipment is equal to the purchase price of $1,000,000 allocated to each asset based on its fair market value. The fair market value of the land is $270,000, the fair market value of the building is $450,000, and the fair market value of the equipment is $180,000. Therefore, Mona's adjusted basis for the land is $270,000, her adjusted basis for the building is $450,000, and her adjusted basis for the equipment is $180,000.

Mona Purchased a Business from Judah for $1,000,000