Dave receives a duplex as a gift from his uncle. The uncle's basis for the duplex and land is $190,000. At the time of the gift, theland and building have fair market values (FMVs) of $51,000 and $119,000, respectively. No gift tax is paid by Dave's uncle atthe time of the gift.Read the requirements.Requirement a. To determine gain, what is Dave's basis for the land? (Do not round intermediary calculations. Only round theamount you input in the cell to the nearest dollar.)To determine gain, Dave's (the donee's) basis for the land isRequirement b. To determine gain, what is Dave's basis for the building? (Do not round intermediary calculations. Only roundthe amount you input in the cell to the nearest dollar.)To determine gain, Dave's (the donee's) basis for the building isRequirement c. Will the basis of the land and building be the same as in Parts a and b for purposes of determining a loss?the basis of the land and buildingthe same as in Parts a and b for purposes of determining a loss because

The tax basis represents the original cost of the property plus certain additional costs. When…

Answered: Dave receives a duplex as a gift from…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bobby owned a building with a fair market value of $2,000,000. Bobby's adjusted basis in the building was $1,000,000. Bobby agreed to sell the building to his son, Robby for $1,300,000. What is the amount of Bobby's taxable gift? Assume the annual gift tax exclusion is $15,000. Bobby has made a taxable gift of $700,000 Bobby has made a taxable gift of $685,000 Bobby has made a taxable gift of $2,000,000 Bobby has not made a taxable gift
Dexter owns a large tract of land and subdivides it for sale. Assume thatDexter meets all of the requirements of § 1237 and during the tax year sellsthe first eight lots to eight different buyers for $22,000 each. Dexter’s basis in eachlot sold is $15,000, and he incurs total selling expenses of $900 on each sale. Whatis the amount of Dexter’s capital gain and ordinary income? Formulate your answerby constructing a spreadsheet using a format similar to that found in Example 10.
Fred and Sarajane exchanged land in a qualifying like-kind exchange. Fred gives up land with an adjusted basis of $11,000 (fair market value of $16,000) in exchange for Sarajane's land with a fair market value of $12,000 plus $4,000 cash. How much gain should Fred recognize on the exchange? a.$4,000 b.$5,000 c.$0 d.$1,000 e.None of these choices are correct
Question 29 of 75. Which of the following is an advantage of selling property using the installment sale method? Spreading the gain over the years of payment may help lower the taxpayer's capital gain tax. The seller is shielded from losses in the event the buyer fails to make all the payments. The seller has immediate access to the funds. Accounting for the sale is generally easy and efficient. Mark for follow up Question 30 of 75. In June 2020, Patrice purchased and placed into service a $12,000 piece of equipment for exclusive use in her business. She claimed the special depreciation allowance that year. In December 2022, Patrice sold the equipment for $15,000. How is her income from the sale of this property treated for tax purposes? $3,000 capital gain; $0 ordinary income. $0 capital gain; $15,000 ordinary income. $3,000 capital gain; $12,000 ordinary income. $15,000 capital gain, $0 ordinary income. Question 31 of 75 Warren is a home…
Yancy's personal residence is condemned as part of an urban renewal project. His adjusted basis for the residence is $537,800. He receives condemnation proceeds of $510,910 and invests the proceeds in stocks and bonds. a. Calculate Yancy's realized and recognized gain or loss. Yancy's realized _______ is $_________ , and Yancy's recognized ______ is $_________. b. If the condemnation proceeds are $562,001, what are Yancy's realized and recognized gain or loss? Yancy's realized _______ is $_________ , and Yancy's recognized ______ is $_________. c. Assume the house is rental property. Yancy's adjusted basis is $537,800 and he receives condemnation proceeds of $510,910 and invests the proceeds in stock. What are Yancy's realized and recognized gain or loss? Yancy's realized _______ is $_________ , and Yancy's recognized ______ is $_________.
Ma1. Part 3: Spouse purchased Blackacre, worth $200,000.00, as tenants by the entirety. Spouses purchased Blackacre in 1990. Upon the death of one of the spouses. a. Does an interest in property pass from the decedent o surviving spouse? b. What is the amount of the marital deduction? Part 4: Decedent leaves property in trust, the income to be paid to parent for parent’s life, and at parent’s death, the corpus to be distributed to decedent’s spouse or spouse estate. Does the transfer quality for a marital deduction?
Moran owns a building he bought during year O for $227,000. He sold the building in year 6. During the time he held the building, he depreciated it by $40,250. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (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 $182,000. Description Amount Total Gain/(Loss) Recognized Remaining $1231 gain (loss)
Which of the following taxpayers may report the sale of their property as an installment sale? (a) Franklin. He sold a tractor to Roberto for $9,000. Roberto made two payments, one payment of $3,500 on May 15 and one payment of $5,500 on September 15 of the tax year. Franklin paid $7,000 for the tractor when it was new; it had fully depreciated before he sold it. (b) Janet. She sold her entire inventory, valued at $8,000, to Marvin for $12,000. Marvin intends to pay Janet $4,000 per year, plus interest, for the next three years. (c) Juan. He sold a plot of land for $50,000. He purchased the land for $45,000 and paid $10,000 to improve it. His buyer intends to pay for the land over five years. (d) Sara. She sold a rental condominium for $125,000. She purchased it for $90,000 and had claimed $20,000 in depreciation. Her buyer intends to pay her $20,000 per year plus 6% interest for five years.
Assume the following exchange meets the necessary requirements and thus qualifies for tax purposes as a “like-kind exchange.” Captain Kirk exchanges land that is used in his business and has a FMV of $610,000 for Spock’s building, which has a FMV of $325,000. Captain Kirk’s basis in the land is $305,000 and Captain Kirk’s land is subject to a liability of $31,000 which Spock assumes. (a) What is Captain Kirk’s recognized gain or loss on this transaction? (b) What is Captain Kirk’s basis in the building? Do NOT GIVE SOLUTION IN IMAGE FORMATE
Moran owns a building he bought during year 0 for $223,000. He sold the building in year 6. During the time he held the building, he depreciated it by $53,500. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (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.) Problem 11-44 Part-a (Algo) a. Moran received $200,000. Description Amount Total Gain/(Loss) Recognized Unrecaptured §1250 gain (and §1231 gain) Remaining §1231 gain (loss)
Anton purchases a building on May 4, 2002, at a cost of $370,000. The land is properly allocated $40,000 of the cost (total cost $410,000). Anton sells the building on October 18, 2020, for $370,000. If an amount is zero, enter "0". a. What is the character of Anton's gain or loss on the sale if he uses the regular MACRS system and the building is an apartment building? Assume the accumulated depreciation at the time of the sale is $208,990. The total gain would be _____, of which ______is Section 1250 recapture and_______is unrecaptured Section 1250. Any balance is considered a long-term capital gain . b. What is the character of Anton's gain or loss on the sale if he uses the regular MACRS system and the building is an office building? Assume the accumulated depreciation at the time of the sale is $147,384. The total gain would be_____, of which _____ is Section 1250 recapture and ______ is unrecaptured Section 1250. Any balance is considered Section 1231 gain
Shari exchanges an office building in New Orleans (adjusted basis of $500,000) for an office building in Baton Rouge (fair market value of $900,000). What is Shari’s realized gain? What is her recognized gain? What is her basis in the building she received?

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