Question

Generally, the recomputed adjusted basis of a repossessed residence is determined by the adjusted basis on the date of the __________.
Original sale plus or minus any adjustments made prior to the repossession. XXX
Original sale plus or minus any adjustments made after the repossession. YYYYY
Resale plus or minus any adjustments made prior to the repossession.
Resale plus or minus any adjustments made after the repossession.

Answer 1

Answer: Original sale plus or minus any adjustments made after the repossession.

Explanation:

Adjusted basis has to do with the change in the value of an asset after the adjustment of some items.

Based on the options given, we should note that the recomputed adjusted basis of a repossessed residence is determined by the adjusted basis on the date of the original sale plus or minus any adjustments made after the repossession.

Therefore, the correct option is B.