Question - Cindy purchases a business for $400,000. The fair market value of the assets of the business, excluding goodwill, is as follows:
Equipment $90,000
Building 210,000
What is Cindy's cost basis in each asset?
$90,000 equipment, $210,000 building, $0 goodwill.
$93,750 equipment, $140,625 building, $15,625 goodwill.
$90,000 equipment, $120,000 building, $100,000 goodwill.
$120,000 equipment, $280,000 building, $0 goodwill.
None of the above.