What is the basis of the machine for cost recovery

Reference no: EM13142524

On June 1 of the current year, Tab converted a machine to rental property. At the time of the conversion, the machine was worth $90,000. Five years ago Tab purchased the machine for $120,000. The machine is still encumbered by a $50,000 mortgage. What is the basis of the machine for cost recovery?

A) $70,000.

B) $90,000.

C) $120,000.

D) $140,000.

E) None of the above.

Reference no: EM13142524

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