On January 20, 20X1. Laurel Transportation Company purchased a new lightweight truck for $46,000. (Use MACRS Table) At the beginning of the year, it became obvious that the truck purchased the year before was too small to handle many of Lauret's jobs. On January 2, 20X2, Laurel traded in the old truck on a new, larger lightweight truck. Its sale price and for market value) was $56,000. The dealer gave Laurel a trade-in allowance of $7.000 for the old truck and Laurel paid the balance of $49,000 in cash Required: 1. For tax purposes, how much gain or loss is recognized on the trade-in? 2. For tax purposes, what is the basis (the cost) to be recorded for the new truck? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For tax purposes, what is the basis (the cost) to be recorded for the new truck? $ 46,000 The cost of the asset for tax purposes is therefore deemed to be Cost of truck purchased on January 20, 20X1 Accum. Depreciation of Truck at beginning of year 2 Romaining costs, January 2, 20X2 Cash paid as boot on trade in Cost of new truck for tax purposes $ 46,000