Determine the depreciate basis of the asset

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In each of the following situations, determine the depreciate basis of the asset (before considering Section 179 election):

1. Maline purchases an office building to use as the main office of her mail order business. She pays the seller $94,800 in cash. In addition, she gives the seller her personal note for $249,300 plus 10 acres of real estate. At the date of the transaction, the real estate, which cost $18,100, is worth $49,500. Property tax records show the land is assessed at $9,900 and the building is assessed at $39,600.

2. Martha's aunt Mabel gives her a used table, which had been stored in Mabel's garage, to use in the conference room in Martha's office. Mabel paid $1,000 for the table several years ago, and it is worth only $730 at the date of the gift. Mabel does not pay any gift tax on the transfer.

Reference no: EM131919555

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