Jack Olaf decided to open an accounting practice and furnished his office with furniture previously used in his residence. The fair market value of the furniture on the date of the conversion was $2,000 and his basis was $4,500.

1. What is Jacks depreciable basis in the furniture?

2. Jack Olaf uses the furniture for one year and depreciates the furniture using the MACRS tables in the proper amount of $400. He sells the furniture to his office neighbor for $1700. What is Jacks gain or loss realized on the sale?

3. On October 7, 2017, Grace Gems purchased a business for the lump-sum price of $200,000. The fair market values of the assets Grace purchased were as follows:

Inventory	$10,000
Land	36,000
Building	90,000
Equipment	15,000
Furniture	9,000

What is Grace's basis in each of the assets? Does she purchase any Goodwill? If so, what is her basis in Goodwill?