5. Yoda purchased a parcel of land three years ago for $35,000. In the current year, Count Dooku sues him, claiming that part of Yoda's property belongs to him. Yoda pays $10,000 in legal fees successfully defending against the lawsuit. He pays annual property taxes of $1,000 on land and has paid $5,000 in interest on the loan he took out to acquire the property. Determine Yoda's adjusted basis in land. A. $45,000 B. $35,000 C. $10,000 D. $46,000 E. $51,000

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
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5. Yoda purchased a parcel of land three years ago for $35,000. In the current year, Count Dooku
sues him, claiming that part of Yoda's property belongs to him. Yoda pays $10,000 in legal fees
successfully defending against the lawsuit. He pays annual property taxes of $1,000 on land and has
paid $5,000 in interest on the loan he took out to acquire the property. Determine Yoda's adjusted
basis in land.
A. $45,000
B. $35,000
C. $10,000
D. $46,000
E. $51,000
Transcribed Image Text:5. Yoda purchased a parcel of land three years ago for $35,000. In the current year, Count Dooku sues him, claiming that part of Yoda's property belongs to him. Yoda pays $10,000 in legal fees successfully defending against the lawsuit. He pays annual property taxes of $1,000 on land and has paid $5,000 in interest on the loan he took out to acquire the property. Determine Yoda's adjusted basis in land. A. $45,000 B. $35,000 C. $10,000 D. $46,000 E. $51,000
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