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- Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During the time he held the building, he depreciated it by $50,000. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? Note: Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable. c. Moran received $136,000.During the current year, Ethel exchanges a business land for different business land in a like-kind exchange. Ethel's adjusted basis in the land given up is $7,000, and she receives a land worth $13,000 plus $3,000 cash. a. Calculate the amount of gain realized by Ethel on the exchange. b. Calculate the amount of the gain that must be recognized by Ethel on the transaction.O Sebastian originally sold his home in an installment sale for $300,000. At the time, his adjusted basis in the home was $220,000. He qualified for the Section 121 principal residence exclusion, so his gain was not included in his taxable income for the year of sale. Three years later, he repossessed the home from the buyer when the balance of the note was $275,000. He spent $8,000 on improvements and resold it within the year for $320,000. What is Sebastian's recomputed adjusted basis in the property? $228,000 $258,000 $278,000 $308,000
- Verlin sells a commercial building and receives $50,000 in cash and a note for $60,000 at 10 percent interest. Verlin's adjusted basis in the building on the date of sale is $45,000 and he collects only the $50,000 down payment in the year of the sale. a. If Verlin elects to recognize the total gain on the property in the year of sale, calculate the taxable gain. b. Assuming Verlin uses the installment sale method, calculate the taxable gain he must report for the year of the sale. c. Assuming Verlin collects $10,000 (not including interest) of the note principal in the year following the year of sale, calculate the amount of income recognized under the installment sale method.During the current year, Jeff sells a tract of land for $700,000. The property was received as a gift from Corina on March 10, 1995, when the property had a $240,000 FMV. The taxable gift was $230,000 because the annual exclusion was $10,000 in 1995. Corina purchased the property on April 12, 1980, for $56,000. At the time of the gift, Corina paid a gift tax of $10,000. In order to sell the property, Jeff paid a sales commission of $14,000. Read the requirements. Requirement a. What is Jeff's realized gain on the sale? Select the formula, then calculate Jeff's realized gain on the sale. (Do not round intermediary calculations. Only round the amounts you input in the cells to the nearest dollar.) Minus: Realized gain Requirement b. How would your answer to Part a change, if at all, if the FMV of the gift property was $50,000 as of the date of the gift? If the FMV of the gift property was $50,000 as of the date of the gift, Stan would have realized a gain on the sale ofLarry is the sole proprietor of a trampoline shop. During 2020, the following transactions occurred. For each transaction, what are the amount and nature of recognized gain or loss? Larry sold an apartment building for $300,000 on September 1. The rental property was purchased on September 1, 2017, for $150,000 and was being depreciated over a 27.5-year life using the straight-line method. At the date of sale, the adjusted basis was $124,783. There is an overall § 1231 gain of $__________ How much § 1250 recapture is recognized? $__________ What is the amount of unrecaptured § 1250? $__________ Larry's personal yacht was stolen on September 5. The yacht had been purchased in August at a cost of $25,000. The fair market value immediately preceding the theft was $19,600. Larry was insured for 50% of the original cost, and he received $12,500 on December 1. There is a tax loss (before AGI limitations) of $__________ that is treated as nondeductable personal casualty loss. Larry sold a…
- Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During the time he held the building, he depreciated it by $50,000. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? Note: Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable. b. Moran received $213,000.Frank's Mini Mart sold a piece of equipment on an installment agreement, to a competitor on the other side of town. The other owner failed to make the payments and Frank had to repossess the equipment. What is Frank's gain or loss on repossessed personal property with a fair market value of $12,000 on the date of repossession, where the seller's basis in the installment obligation at the time of repossession is $7,500, and the costs of repossession were $500? (a) Loss of $500. (b) Gain of $4,000. (c) Gain of $4,500 (d) Gain of $5,000.Jacob purchased business equipment for $144,900 in 2018 and has taken $86,940 of regular MACRS depreciation. Jacob sells the equipment in 2021 for $65,205. What is the amount and character of Jacob's gain or loss? If an amount is zero, enter "0". Jacob has § 1245 gain of $fill in the blank 1 and § 1231 gain of $fill in the blank 2.
- Theresa Perry exchanged her investment-use real property for a larger piece of investment-use property. At the time of the exchange, the fair market value (FMV) of the property she traded was $55,000, and her adjusted basis in this property was $27,000. She also provided $11,000 cash. In the exchange, she received investment-use property with an FMV of $66,000.What is Theresa's gain realized and the gain recognized on the exchange? $0 and $28,000 $11,000 and $38,000 $28,000 and $0 $38,000 and $11,000Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother, Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the duplex to his business associate to whom he was not related for $312,000. What is Bob's bases in the triplex? Select one of the answers below and show your work: a. $86,000 b. $279,000 c. $300,000 d. $312,000The executor of Rose Shield’s estate listed the following properties (at fair value): Prepare journal entries to record the property held by Ms. Shield’s estate and then each of the following transactions that occur in the months following the decedent’s death: Claims of $80,000 are made against the estate for various debts incurred before the decedent’s death. Interest of $12,000 is received from bonds held by the estate. Of this amount, $5,000 had been earned prior to death. Ordinary repairs costing $6,000 are made to the rental property. All debts ($80,000) are paid. Stocks recorded in the estate at $16,000 are sold for $19,000 cash. (Rental income of $14,000 is collected. Of this amount, $2,000 had been earned prior to the decedent’s death. (7) Cash of $6,000 is distributed to Jim Arness, an income beneficiary. The proceeds from the life insurance policy are collected and the money is immediately distributed to Amanda Blake as specified in the decedent’s will. Funeral expenses…
