Mary Exchanged an Office Building Used in Her Business for Some

question 78

Multiple Choice

Mary exchanged an office building used in her business for some land. Mary originally purchased the building for $45,000 and it had an adjusted basis of $20,000 at the time of the exchange. The land had a fair market value of $40,000. Mary also gave $4,000 to the  in the transaction. What is Mary's adjusted basis in the land after the exchange?

• A) $20,000.
• B) $24,000.
• C) $36,000.
• D) $40,000.
• E) None of the choices are correct.

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Definitions:

Appreciates

Refers to the increase in value of an asset over time.

Indirect Quote

A foreign exchange rate quoted as the domestic currency per unit of the foreign currency.

Journal Entry

A record in the accounting ledger that represents a single financial transaction, showing debit and credit accounts affected.