Ernie owns a warehouse that is destroyed by fire on March 21, 2014. The warehouse, which had an adjusted basis of $50,000 at the time of the fire, was insured at its fair market value of $120,000. Ernie collects the $120,000 insurance on May 11, 2014.  a. What is the latest date that qualifying replacement property can be acquired? b. Assume Ernie invests $80,000 of the insurance proceeds in replacement property on November 1, 2014. What is his gain or loss if Section 1033 is properly elected? c. What is the basis of the replacement property in b. above?

Q: Jessica’s office building is destroyed by fire on November 15, 2020. The adjusted basis of the…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: The Lyns live in their own home at 40 Cavin Ave, on which they have a mortgage balance of…

A: Loan amount is 75% of purchase price or property value which ever is lower maximum up to $20,000,000…

Q: On July 1, 2018, Brent purchases a new automobile for $46,000. He uses the car 82% for business and…

A: Depreciation is the reduction in the value of the assets due to its use or wear and tear. The…

Q: Bev bought a small mom and pop grocery store. The sale was completed and Bev obtained ownership on…

A: Intangible Assets: An intangible asset is an asset that needs real substance. This is as opposed to…

Q: During 2020, William purchases the following capital assets for use in his catering business: New…

A: Depreciation: The word "depreciation" refers to an accounting procedure that is used to spread the…

Q: In October 2019, Old MacDonald sold some farm cottages for $90,000 and incurred legal fees of…

A: Capital gain is a one-time profit earn on the sale of fixed assets.

Q: Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During…

A: Section 1231 of the Internal Revenue Code in the United States defines the tax treatment of these…

Q: Moran owns a building he bought during year 0 for $150,000. He sold the building in year 6. During…

A: To extent of depreciation will be treated as section 1250 Unrecaptured gain.  Balance gain is…

Q: On 1 July 2000, Genevieve purchased a property in Sydney for $300,000 Her intention was to use it…

A: The cost base of the property is the amount Genevieve paid for it, which is $300,000. The capital…

Q: William purchases nonresidential real property costing $300,000 and places it in service in March…

A: Answer  As per MACRS depreciation schedule  Depreciation rate  for first year  2.03333%  For second…

Q: Taxpayer T built

A: A recognized gain is the profit you make from selling an asset. Recognized gains are different…

Q: Roger, an individual, owns a proprietorship Green Options. For the year 2020, Roger reports the…

A: The adjusted gross income is calculated by deducting the business expense, loss on business machine…

Q: Harrison puts $13,000 of 5-year listed property into service in his business during April. He uses…

A: Half-year convention:In order to compute depreciation for tax reasons, the half-year convention is…

Q: ob purchased land as an investment on January 12, 2018, for $80,000. On January 31, 2021, Job sold…

A: Recognized gains and realized gains are two types of capital gains that indicate profits generated…

Q: How much gain or loss must he recognize on the exchange? $80,000 gain $0 $50,000 loss $50,000 gain

A: For Bob’s case, the gain or loss recognized on the exchange is calculated as follows:The total value…

Q: What is Andrew's realized amount from the foreclosure? $205,000 $210,000 $223,000 $225,000

A: Nonrecourse Debt The only recourse available to the lender under a nonrecourse debt (loan) is the…

Q: Tina disposed of a painting on 1 July 2022 for $600,000 which she had bought February 2018 for…

A: A capital gain is the profit realized when an asset, such as a stock, real estate, or a collectible,…

Q: In April 2019, Mario purchased a new refrigerator for $700 and placed it in service in his rental…

A: Section 1245 assets: Comprises personal property used in trade or business and held for over 12…

Q: Moran owns a building he bought during year O for $227,00O. He sold the building in year 6. During…

A: The question is based on the concept of Financial Accounting.

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A: a.

Q: property with a fair market value of $120,000. What is the amount realized? a.) $1,370,000 b.)…

A:

Q: Villiam decides to use the election to expense on the baking equipment (and has ade celerated method…

A: MACRS Method -  The full form of MACRS is Modified Accelerated Cost Recovery System. It is a…