Assume is Elaine is in the 37% marginal income tax bracket and the 20% bracket for long-term capital gains. What is Elaine’s tax liability from these transactions? #1 Elaine transferred Blackacre (held for investment for 3 years) to Bob in exchange for Whiteacre in a section 1031 exchange. At the time of the exchange, Blackacre has a FMV of $105,000 and is subject to a mortgage of $80,000. Whiteacre has a FMV of $95,000 and is subject to a mortgage of $70,000. Elaine’s basis in Blackacre was $100,000 at the time of the transaction and Bob’s basis in Whiteacre was $50,000. Each party assumes the other’s debt. #2 Sold Greenacre (held for investment for 2 years) to Jerry for $180,000 cash + Jerry’s assumption of Elaine’s $120,000 mortgage on Greenacre. Elaine’s basis in Greenacre was $210,000 at the time of the sale. #3 Sale of antique stamp collection (held for 10 years) for $35,000. Elaine’s basis in the stamps was $5,000 at the time of the sale. #4 Sale of a warehouse used in Elaine, LLC (a single-member LLC disregarded for tax purposes). Elaine sold the warehouse for $400,000. Her basis in the warehouse at the time of the sale was $370,000 and the accumulated depreciation was $20,000. She owned and used the warehouse in her business for 2 years. #5 Sale of Tangerine, Inc. stock. Held for 18 months. Sales price = $20,000, stock basis = $10,000. #6 Sale of Kiwi, Inc. stock. Held for 9 months. Sales price = $30,000, stock basis = $100,000 #7 Sale of Dragonfruit, Inc. stock. Held for 10 days. Sales price = $100,000, stock basis = $50,000. #8 Elaine owns a large office building in the suburbs that she leases to an accounting firm. Rents in the area have fallen substantially since the accounting firm signed the lease. As a result, the accounting firm would like to cancel the remainder of the lease. Elaine agrees in exchange for $100,000 from the accounting firm. #9 Elaine, LLC rents (as a tenant) an office building downtown. Elaine uses the office building in her business. Since signing the lease two years ago, rents in the area have rose dramatically. The lease is assignable, so Elaine LLC decides to sell its rights and obligations in the lease to a law firm in exchange for $140,000. Carryover Elaine has a long-term capital loss carryover of $100,000.
Assume is Elaine is in the 37% marginal income tax bracket and the 20% bracket for long-term
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#1 |
Elaine transferred Blackacre (held for investment for 3 years) to Bob in exchange for Whiteacre in a section 1031 exchange. At the time of the exchange, Blackacre has a FMV of $105,000 and is subject to a mortgage of $80,000. Whiteacre has a FMV of $95,000 and is subject to a mortgage of $70,000. Elaine’s basis in Blackacre was $100,000 at the time of the transaction and Bob’s basis in Whiteacre was $50,000. Each party assumes the other’s debt. |
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#2 |
Sold Greenacre (held for investment for 2 years) to Jerry for $180,000 cash + Jerry’s assumption of Elaine’s $120,000 mortgage on Greenacre. Elaine’s basis in Greenacre was $210,000 at the time of the sale. |
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#3 |
Sale of antique stamp collection (held for 10 years) for $35,000. Elaine’s basis in the stamps was $5,000 at the time of the sale. |
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#4 |
Sale of a warehouse used in Elaine, LLC (a single-member LLC disregarded for tax purposes). Elaine sold the warehouse for $400,000. Her basis in the warehouse at the time of the sale was $370,000 and the |
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#5 |
Sale of Tangerine, Inc. stock. Held for 18 months. Sales price = $20,000, stock basis = $10,000. |
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#6 |
Sale of Kiwi, Inc. stock. Held for 9 months. Sales price = $30,000, stock basis = $100,000 |
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#7 |
Sale of Dragonfruit, Inc. stock. Held for 10 days. Sales price = $100,000, stock basis = $50,000. |
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#8 |
Elaine owns a large office building in the suburbs that she leases to an accounting firm. Rents in the area have fallen substantially since the accounting firm signed the lease. As a result, the accounting firm would like to cancel the remainder of the lease. Elaine agrees in exchange for $100,000 from the accounting firm. |
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#9 |
Elaine, LLC rents (as a tenant) an office building downtown. Elaine uses the office building in her business. Since signing the lease two years ago, rents in the area have rose dramatically. The lease is assignable, so Elaine LLC decides to sell its rights and obligations in the lease to a law firm in exchange for $140,000. |
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Carryover |
Elaine has a long-term capital loss carryover of $100,000. |
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