Ed Edmonds exchanged a business truck with an adjusted basis of $320,000 for another business truck with a fair market value of $20,000, a boat with a fair market value of $6,000, and $2,000 cash. What is the basis of the new truck?
A) $18,000
B) $20,000
C) $24,000
D) $30,000
E) $32,000

Question

Quizplus · Accepted Answer

the basis is $24,000 ($32,000 adjusted basis of old asset less the boot received of $8,000). Although there was a realized loss of $4,000, there was no recognized loss.

Ed Edmonds Exchanged a Business Truck with an Adjusted Basis