Question

Manassas purchased a computer several years ago for $2,200. On November 10 th of the current year, the computer was worth $800. If $1,000 of depreciation deductions had been taken, what is Manassas' tax adjusted basis for the computer?

Answer 1

The tax-adjusted basis for Manassas' computer, originally purchased for $2,200 and with $1,000 of depreciation taken, is $1,200.

Step-by-step explanation:

The question pertains to calculating the tax-adjusted basis for a computer used in a business setting. To calculate the tax-adjusted basis, you subtract any depreciation taken from the original cost of the asset.

Manassas purchased the computer for $2,200 and has taken $1,000 in depreciation deductions. Therefore, the tax-adjusted basis would be calculated as follows:

Original cost of the computer: $2,200
Minus depreciation taken: $1,000
Equals tax-adjusted basis: $1,200

In this case, Manassas' tax-adjusted basis for the computer would be $1,200.