Question: Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. He had used it for business purposes and had deducted

Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. He had used it for business purposes and had deducted $10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is $33,000.
a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation?
b. Assume that Nicky deducts depreciation of $6,500 and then sells the car for $32,500.
What is her recognized gain or loss?
c. Assume that Nicky deducts depreciation of $6,500 and then sells the car for $20,000.
What is her recognized gain or loss?

Step by Step Solution

★★★★★

3.42 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a The basis for depreciation is the donees gain basis of 38000 48000 cost 10000 acc... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

459-L-B-L-T-L (389).docx

120 KBs Word File

Students Have Also Explored These Related Business Law Questions!

Sandra will invest a piece of equipment with a book value of $5,800 and a fair market value of $17.000. Kelsey will invest a building with a book value of $42,800 and a fair market value of $63.300...

Is depreciation deducted for tax purposes likely to differ from book (or financial accounting) depreciation? Explain.

Ten years ago, Dudley contributed land to Prosperity LLC. His basis in the land was $260,400. The fair market value at the contribution date was $299,460. This year, when the property's value was...

1, 2, 3 Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. He had used it for business purposes and had deducted $10,000 for depreciation up to the time he gave the car to Nicky....

LO . 1 , 2 , 3 , 4 Nicky receives a car from Sam as a gift. Sam paid $ 4 8 , 0 0 0 for the car. Sam had used it for business purposes and had deducted $ 1 0 , 0 0 0 for depreciation up to the time...

. Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. Sam had used it for business purposes and had deducted $10,000 for depreciation up to the time she gave the car to Nicky. The...

Problem 7-15 (LO. 1, 2, 3) Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. He had used it for business purposes and had deducted $10,000 for depreciation up to the time he gave...

Nicky receives a car for Sam as a gift. Sam paid $48,000 for the car. He had used the car for business purposes and had deducted $10,000 for depreciation up to the time he gave the car to Nicky. The...

58. Nicky receives a car from Sam as a gift. Sam paid $40,000 for the car. He had used it for business purposes and had deducted $16,000 for depreciation up to the time he gave the car to Nicky. The...

58. LO.1, 2, 4 Nicky receives a car from Sam as a gift. Sam paid $48,000 for the car. He had used it for business purposes and had deducted $10,000 for depreciation up to the time he gave the car to...

1. Which Accounting Standards are followed in Bahrain? 2. What is the Accounting Regulation Body in Bahrain for commercial companies? 3. Identify the decree law which set out how commercial companies...

Using the industry from the Panera Company, explain the major factors that enter into an assessment of whether an industry does or does not have long-term attractiveness? Can an industry be...

Questions 1 - 3 Use the following information on Black Red to answer questions 1 - 3 . Black Red sells $ 3 0 million of its furniture products to wholesalers on credit terms of "net 3 0 . "...

True or False. Receivables management deals only with the collection of cash from the debtors.

Your client is a new partnership, ARP Associates, which is an engineering consulting firm. Generally, ARP bills clients for services at the end of each month. Client billings are about $50,000 each...

Nations with higher income levels have _______ average life expectancy and are ____ diverse. Group of answer choices higher, less higher, more lower, more lower, less

A loan of $1730 at 9.75% interest compounded semi-annually is to be repaid in four years in equal semi-annual payments. Complete an amortization schedule for the first four payments of the loan....

Chapman, Inc. ' s Mexican subsidiary, V . Gomez Corporation, is expected to pay to Chapman 4 0 pesos in dividends in 1 year after all foreign and U . S . taxes have been subtracted. The exchange rate...