A businessman purchases three trucks at an auction.Six months later, he sells one of the trucks.He may choose as his basis for this truck either his adjusted basis in the truck or the FMV of the truck on the date of the auction.

Question

Quizplus · Accepted Answer

The basis for determining gain or loss on the sale of an asset is generally the asset's adjusted basis, not the fair market value (FMV) on the date of acquisition.

A Businessman Purchases Three Trucks at an Auction