McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 71

Meg O'Brien received a gift of some small-scale jewelry manufacturing equipment that her father had used for personal purposes for many years.Her father originally purchased the equipment for $1,500.Because the equipment is out of production and no longer available, the property is currently worth $4,000.Meg has decided to begin a new jewelry manufacturing trade or business.What is her depreciable basis for depreciating the equipment?