On January $5,2024,$ Lucy purchased a new, cordless vacuum cleaner for $$1,200($the fair market value at the time$).$ She immediately contributed it to the business.

How will this contribution of property affect Lucy's outside basis for Tax Year $2024?$

Her outside basis will:

Increase by $$1,200.$

Increase by $$600.$

Decrease by $$1,200.$

Not be affected by the contribution.