Rosilyn trades her old business-use car with an adjusted basis of $13,000 and an outstanding loan liability balance of $2,000 for a new business-use car valued at $9,000 plus $3,000 cash from Bob's Auto Sales and Loan Company. Bob assumes Rosilyn's loan balance. How much boot does Rosilyn receive in the transaction?
A)$- 0 -
B)$1,000
C)$2,000
D)$3,000
E)$5,000

Question

Quizplus · Accepted Answer

Rosilyn receives $3,000 in cash and Bob assumes her $2,000 loan, totaling $5,000 in boot.

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