Question

Lisa sells business property with an adjusted basis of $198,700 to her son, alfred, for its fair market value of $158,960.

Answer 1

This question is about the sale of business property and the concept of adjusted basis and fair market value.

Step-by-step explanation:

This question is about the sale of business property and the concept of adjusted basis and fair market value.

Adjusted basis refers to the original cost of the property plus any improvements or deductions. In this case, Lisa's adjusted basis is $198,700.

Fair market value is the price at which property would be sold between a knowledgeable buyer and seller, neither of whom is under any compulsion to buy or sell. Alfred purchased the property from Lisa for $158,960, which is the fair market value.