Ask Question
24 November, 06:20

Horace sells equipment with an adjusted basis of $20,000 to his great-grandson, Matthew, for its fair market value of $15,000. Matthew sells the equipment to an unrelated party for $17,000. What are Matthew's realized and recognized gains (losses) upon the sale?

+4
Answers (1)
  1. 24 November, 06:38
    0
    The recognized gains upon the sale is $2000.

    Explanation:

    As the cost of purchase of the equipment to Mathew is $15000 and the sale proceeds received is $17000. The gain is actually calculated as follows;

    Gain = Sale proceeds - Cost of equipment

    Gain = Matthew sells the equipment to an unrelated party for $17,000 - Matthew bought equipment for its fair market value of $15,000

    Which is $1700 - $1500 = $2000

    Therefore the recognized gains upon the sale is $2000.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Horace sells equipment with an adjusted basis of $20,000 to his great-grandson, Matthew, for its fair market value of $15,000. Matthew ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers