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: $$\begin{array} { l r r }
& \text { Adjusted Basis } & \text { FMV } \
\text { Land } & \$ 195,000 & \$ 270,000 \
\text { Building } & 310,000 & 450,000 \
\text { Equipment } & 95,000 & 180,000
\end{array}$$ ? 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: $$\begin{array} { l r r } 
& \text { Adjusted Basis } & \text { FMV } \
\text { Land } & \$ 195,000 & \$ 270,000 \
\text { Building } & 310,000 & 450,000 \
\text { Equipment } & 95,000 & 180,000
\end{array}$$ ? 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 in proportion to its fair market value. Therefore, Mona's adjusted basis for the land is $195,000, for the building is $310,000, and for the equipment is $95,000.

Mona Purchased a Business from Judah for $1,000,000 ? What Is Mona's Adjusted Basis for the Land, Building