Janis purchased an asset for $40,000. During the five years she owned the asset she deducted $30,000 of depreciation expense and spent $5,000 on a major improvement. Determine Janis's gain or loss on the sale of the asset for: a. $19,000; b. $8,000

Question

Quizplus · Accepted Answer

The Answer is Adjusted basis = $40,000 - $30,000 + $5,000 = $15,000
a. $19,000 - $15,000 = $4,000 gain
b. $8,000 - $15,000 = $7,000 loss

Janis Purchased an Asset for $40,000