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Basis for a New Truck

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Garnet, Inc., owns a delivery truck which initially cost $30,000. After depreciation of $15,000 had been deducted, the truck was traded-in on a new truck that cost $40,000. Garnet was required to pay the car dealer $20,000 in cash. What is Garnet's basis for the new truck?

a. $0.

b. $35,000.

c. $40,000.

d. $45,000.

e. None of the above.

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Solution Summary

Quick calculations to find the basis for a new delivery truck after depreciation of the old one.

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