Barry sold depreciable property used in his business to Ken for $192,000 cash plus a bond redeemable in 5 years for $95,000, but currently trading on the NYSE for $98,000. The property cost Barry $310,000 plus $45,000 in capital improvements and had actual accumulated depreciation at the time of the sale of $225,000. The amount of accumulated depreciation he should have taken was $205,000. Determine the amount of gain or loss recognized. Explain your conclusions including the various components of how you determined your answer.
Barry sold
Determine the amount of gain or loss recognized. Explain your conclusions including the various components of how you determined your answer.
Q.2
During 2019, Anna had the following transactions:
Salary $90,000
Interest income on IBM bonds 3,000
Damages for physical personal injury (car accident) 115,000
Punitive damages (same car accident) 150,000
Stock dividends from Chevron Corp Stock with option to receive
cash of $15,000 or stock valued at $22,000 (Anna opted to that the stock)
Q.3
Joseph exchanged farmhouse that he used in his farming business for a building used by Sandy in her motorcycle manufacturing business. The farmhouse had a FMV of $875,000 and cost $415,000. Joseph $245,000 of depreciation, but because of an error, the amount of depreciation he should have taken was $330,000. The building had a FMV of $700,000 and an adjusted basis of $825,000. Additionally, Sandy agreed to assume Joseph’s mortgage of $150,000 and give Joseph cash of $25,000. What is Joseph’s realized gain or loss?
Calculate Joseph’s basis in the building after the transaction. How much gain or loss did Joseph defer? Explain your answer.
Determine Sandy’s recognize gain or loss show your calculation and explain your answer?
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