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:

Passive Verbs

Verbs that indicate an action being done to the subject, often leading to less direct or weaker statements.

Deductive Sequence

A method of organizing information in writing that starts with a general statement or conclusion, followed by specific details or evidence.

Persuasive Claims

Arguments or statements designed to convince or influence an audience to adopt a particular opinion, idea, or course of action.

Central Selling Point

is the unique feature or benefit of a product or service that is emphasized to differentiate it from competitors and appeal to consumers.