Melba Gives Her Niece a Drill Press to Use in Her

question 76

Multiple Choice

Melba gives her niece a drill press to use in her business with a fair market value of $36,000 and a basis in Melba's hands of $41,000.What is the niece's basis for depreciation (cost recovery) ?

• A)$0.
• B)$5,000.
• C)$36,000.
• D)$41,000.
• E)None of the above.

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Definitions:

Creditors' Meeting

A gathering organized during the bankruptcy process where creditors can question the debtor about their finances and the proposed plans for reorganizing or settling debts.

Bankruptcy

A legal status for individuals or entities that cannot repay the debts they owe, allowing them to seek relief through court intervention.

Dischargeable Debts

Debts that can be eliminated through bankruptcy, relieving the debtor from any further obligation for these debts.

Chapter 13

A chapter of the U.S. Bankruptcy Code allowing individuals with regular income to develop a plan to repay all or part of their debts.