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What is Tony basis in the car wash equipment

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Q1. During the current year, Tony purchased new car wash equipment for use in his service station business. Tony's costs in connection with the new equipment this year were as follows:

Cost of the equipment $45,000

Sales tax on the equipment 4,000

Delivery charges 600

Installation and testing charges 3,000

Expenses of operating the equipment 2,000

What is Tony's basis in the car wash equipment?

A. $52,600

B. $49,000

C. $49,600

D. $54,600

Q2. Rebecca is the beneficiary of a $500,000 insurance policy on her husband's life. She elects to receive $52,000 per year for 10 years rather than receive the entire amount in a lump sum. Of the amount received each year

A. $50,000 is taxable income.

B. $2,000 is taxable income.

C. $52,000 is taxable income.

D. $5,000 per year is tax free as a death benefit.

Reference no: EM133129364

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