Eliot IncTransferred an Old Asset with a $53,100 Adjusted Tax Basis

question 44

Multiple Choice

Eliot Inc.transferred an old asset with a $53,100 adjusted tax basis plus $5,000 cash in exchange for a new asset worth $75,000.Which of the following statements is false?

• A)The old asset's FMV is $70,000.
• B)If the exchange is nontaxable,Eliot's recognized gain is $5,000.
• C)If the exchange is nontaxable,Eliot's tax basis in the new asset is $58,100.
• D)None of the statements is false.

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Definitions:

Income Tax Return

A document filed with a government body, outlining income, expenses, and other tax-related information to determine tax liability.

Extension

An allowance for additional time granted by the IRS to file tax returns beyond the original due date.

Charitable Contribution

A donation or gift to a qualified organization that is eligible for a tax deduction.

Adjusted Gross Income

An individual's total gross income minus specific deductions, used to determine taxable income on an income tax return.