Peach, Inc., owns a delivery truck (cost of $35,000) on which depreciation of $21,000 has been deducted.The truck and $14,000 cash are used to acquire a new truck at a cost of $40,000.What is Peach's basis for the new truck?
A)$0.
B)$28,000.
C)$40,000.
D)$49,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Peach's basis for the new truck is calculated by adding the adjusted basis of the old truck ($35,000 - $21,000 = $14,000) to the cash paid ($14,000), resulting in a total basis of $28,000.