Problem: Milton acquired a truck used in his trade or business for $80,000. He paid $55,000 cash and signed a promissory note payable to Bank X for the remaining $25,000. The note was set at an interest rate equal to the applicable federal rate of interest.
Which of the following statements is correct?
Select one:
a. Milton's basis in the truck is $80,000 plus the interest on the debt.
b. Milton's amount realized is $25,000.
c. Milton's basis in the truck is not determinable under the facts presented because repayment of the debt has not occurred.
d. The debt is not included in basis because it is contingent.
e. None of the above.