In 2012, Allen Anders sold an asset which cost $70,000. Allen incorrectly claimed $40,000 depreciation over a ﬁve-year period. He should have claimed $50,000 depreciation. What was the adjusted basis when sold?
A) $0
B) $20,000
C) $30,000
D) $50,000
E) $70,000

Question

Quizplus · Accepted Answer

An adjustment is to be made to the basis of an asset for the amount of depreciation allowed in previous years, but the adjustment cannot be less than the amount allowable
 the refore, the adjusted basis of the asset when sold was $20,000 ($70,000 - $50,000).

In 2012, Allen Anders Sold an Asset Which Cost $70,000