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.