Tom ftompson traded in a station wagon (used in his business) which had an adjusted basis of $7,700 for a new one costing $26,900. fte auto dealer allowed a trade-in allowance of $8,000 on the old station wagon and Tom paid $18,900 in cash. What is Tom's basis in the new station wagon?
A) $18,900
B) $15,700
C) $26,600
D) $26,900

Question

Quizplus · Accepted Answer

the re is no gain or loss recognized in a where cash boot is given situation. the refore, the basis of the new station wagon is the basis of the old station wagon of $7,700 plus the boot given of $18,900, or $26,600.

Tom Ftompson Traded in a Station Wagon (Used in His