Question

Generally, the recomputed adjusted basis of a repossessed residence is determined by the adjusted basis at the time of the __________.

a. Original sale plus or minus any adjustments made prior to the repossession.

b. Original sale plus or minus any adjustments made after the repossession.

c. Resale plus or minus any adjustments made prior to the repossession.

d. Resale plus or minus any adjustments made after the repossession.

Answer 1

b. Original sale plus or minus any adjustments after the repossession.

Step-by-step explanation:

Adjusted basis refers to the change is assets value after adjusting various items. The adjusted basis of a repossessed residence is calculated by adjusted basis at time of original sale plus or minus any adjustments made after repossession. Adjusted basis at time of repossession, make adjustments to the value of asset after the repossession.