The following information pertains to the acquisition of a six-wheel truck by Sol Barr, a self-employed contractor:
|
Cost of original truck traded in |
$20,000 |
|
|
Book value of original truck at trade-in date |
4,000 |
|
|
List price of new truck |
25,000 |
|
|
Trade-in allowance for old truck |
6,000 |
|
|
Business use of both trucks |
100 |
% |
The basis of the new truck is
- $27,000
- $25,000
- $23,000
- $19,000