Choose the response that best describes how the basis of purchased property is determined.

a. The lower of fair market value (FMV) or the adjusted basis for the seller. O

b. The adjusted basis of the property in the hands of the seller.

c. The fair market value (FMV) of similar property.

d. The purchase price of the property plus certain costs incurred at the time of purchase.

Question

Evelyn Cervantes

Business

1 November, 00:53

Choose the response that best describes how the basis of purchased property is determined.

a. The lower of fair market value (FMV) or the adjusted basis for the seller. O

b. The adjusted basis of the property in the hands of the seller.

c. The fair market value (FMV) of similar property.

d. The purchase price of the property plus certain costs incurred at the time of purchase.

+4

Answers (1)

Know the Answer?

Mattie Hodge · Answer 1

The correct answer is D

Explanation:

Basis is the amount of the home or property which is worth for the purposes of tax. When the person sold the property, the loss or gain for the purpose of tax, which is determined by deducting the basis on the sale date from the price of sale (in addition to the sales expense).

Basis is the original cost of the property adjusted for the factors like depreciation. Therefore, the correct and right response which states the basis of the property is determined by the purchase price of the property in addition to the cost incurred at the time or duration of purchase.