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

question 51

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 the above

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Definitions:

Society for Human Resource Management

A professional association dedicated to the advancement of human resource professionals, offering education, certification, and advocacy for HR practices.

Quality Workforce

An employment group characterized by high skill levels, efficiency, and a commitment to producing high-quality work.

Competitive Salaries

Compensation levels offered by employers that are at or above the market rate to attract and retain talent.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they pay.