Rosilyn trades her old business-use luxury car with an adjusted basis of $13,000 and an outstanding loan liability balance of $2,000 for a new business-use economy car valued at $9,000 plus $3,000 cash from Bob's Auto Sales and Loan Company. Bob assumes Rosilyn's loan balance. What is Rosilyn's amount realized on the transaction?
A)$3,000
B)$9,000
C)$12,000
D)$13,000
E)$14,000

Question

Quizplus · Accepted Answer

The amount realized from the transaction includes the value of the new car ($9,000), the cash received ($3,000), and the loan balance assumed by Bob ($2,000), totaling $14,000.

Rosilyn Trades Her Old Business-Use Luxury Car with an Adjusted