(e) What is the total amount that must be paid back? () How much of the total amount repaid
represents interest? 2.13 A tractor with an adjusted basis (from depreciation) of $60,000 is sold
for $55,000 and a new tractor purchased with a cash payment of $325,000 These are two
separate transactions. What is the tax depreciation basis of the new tractor? 2.14) A tractor with
an adjusted basis (from depreciation) of $65,000 $345,000 is traded for a new tractor that has a
fair market value of $270,000 is made to complete the transaction. A cash payment of What is
the tax depreciation basis of the new tractor? k Ge nius Scon
Solution
every country allows a tax deduction for the recovery of the cost of assets. these are allowed for
companies. Where the assets are used currently, the cost may be deducted as an expense or
considered as part of cost of goods sold
1. sold - $55000,
actual basis depreciation - $60,000 payment - $325000.
Tax depreciation is 55000 $ on the payment on $ 325000.
2. actual basis depreciation - $65,000 , Fair value - $345000 ,
cash payment - $270000,
Tax depreciation - 65000$ on the payment of $270000.