On June 1 of the Current Year, Tab Converted a Machine

question 32

Multiple Choice

On June 1 of the current year, Tab converted a machine from personal use to rental property.At the time of the conversion, the machine was worth $90,000.Five years ago, Tab purchased the machine for $120,000.The machine is still encumbered by a $50,000 mortgage.What is the basis of the machine for cost recovery?

• A)$70,000
• B)$90,000
• C)$120,000
• D)$140,000
• E)None of these.

---

Definitions:

Lindane

A chemical used in medications and insecticides, previously common in treatments for lice and scabies, now restricted due to health risks.

In-The-Canal Hearing Aid

A type of hearing aid that fits partially or completely in the ear canal, offering cosmetic and some auditory advantages.

Cerumen Buildup

Accumulation of earwax in the ear canal, which can lead to blockage and hearing issues.

Excessive Moisture

An overabundance of water or humidity, which can lead to negative effects such as mold growth or skin irritation.