Jordan paid $30,000 for equipment two years ago and has claimed total depreciation deductions of $15,600 for the two years. The cost of repairs during the same time period was $2,000 while a major overhaul which extended the life of the equipment cost $7,000. What is Jordan's adjusted basis in the equipment at the end of the two-year period

$21400

Explanation:

Cost of equipment = $30,000

Depreciation = $15600

Cost of repairs = $2000

Overhaul = $7000

Jordan's adjusted basis in the equipment at the end of the two-year period will be:

= Equipment cost - Depreciation + Overhaul

= $30000 - $15600 + $7000

= $21,400

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