Samantha exchanges a truck used in her business with Phyllis for another truck.The basis of Samantha's old truck is $25,000,FMV is $33,000,and she gives Phyllis cash of $7,000.Phyllis's basis in her truck is $35,000 and its FMV is $40,000.What is Samantha's adjusted basis in the new truck she receives?

Question

Quizplus · Accepted Answer

Samantha's adjusted basis in the new truck would be the sum of the FMV of her old truck ($33,000) and the cash she paid to Phyllis ($7,000), which is $40,000. This is because in a like-kind exchange, the adjusted basis of the property received equals the adjusted basis of the property given up plus any additional cash paid. Therefore, the correct answer is D) $32,000.

Samantha Exchanges a Truck Used in Her Business with Phyllis