Brenda purchased a business for $120,000 and received a building, FMV $80,000; l
ID: 2334788 • Letter: B
Question
Brenda purchased a business for $120,000 and received a building, FMV $80,000; land, FMV $10,000; and furniture and fixtures, FMV $30,000. She spent $10,000 on legal fees to make the purchase. What is the basis of these items? $82,500 building; $12,500 land; $35,000 furniture and fixtures. $88,750 building; $11,250 land; $30,000 furniture and fixtures. $80,000 building; $10,000 land; $30,000 furniture and fixtures. $86,667 building; $10,833 land; $32,500 furniture and fixtures. Brenda purchased a business for $120,000 and received a building, FMV $80,000; land, FMV $10,000; and furniture and fixtures, FMV $30,000. She spent $10,000 on legal fees to make the purchase. What is the basis of these items?Explanation / Answer
percentage = 80,000:10,000:30,000 8 : 1 : 3 total cost = 120,000+10,000 legal fees 130,000 Basis Building 130,000/12*8= 86,667 land 130,000/12*1= 10833 furniture 130,000/12*3 = 32500 last option is correct