Exercise 13-39 (Algorithmic) (LO. 7) On February 24, 2020, Allison's building, with an adjusted basis of $3,763,700 (and used in her trade or business), is destroyed by fire. On March 31, 2020, she receives an insurance reimbursement of $4,892,810 for the loss. Allison invests $4,403,529 in a new building and buys stock with the balance of insurance proceeds. Allison is a calendar year taxpayer. a. By what date must Allison make the new investment to qualify for the nonrecognition election? b. Assuming that the replacement property qualifies as similar or related in service or use, what are Allison's realized gain, recognized gain, and basis in the replacement building? and recognized gain is $ Allison's realized gain is $ . Her basis in the new building is $

Exercise 13-39 (Algorithmic) (LO. 7) On February 24, 2020, Allison's building, with an adjusted basis of $3,763,700 (and used in her trade or business), is destroyed by fire. On March 31, 2020, she receives an insurance reimbursement of $4,892,810 for the loss. Allison invests $4,403,529 in a new building and buys stock with the balance of insurance proceeds. Allison is a calendar year taxpayer. a. By what date must Allison make the new investment to qualify for the nonrecognition election? b. Assuming that the replacement property qualifies as similar or related in service or use, what are Allison's realized gain, recognized gain, and basis in the replacement building? and recognized gain is $ Allison's realized gain is $ . Her basis in the new building is $

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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A 89. Subject:- accounting
Interview Notes • Carmen, age 61, is single. She owns her home and provided all the costs of keeping up her home for the entire year. Her only income for 2023 was $48,000 in W-2 wages. . . Abigail, age 24, and her daughter Andrea, age 4, moved in with Abigail's mother, Carmen, after she separated from her spouse in April of 2021. Abigail's only income for 2023 was $25,000 in wages. Abigail provided over half of her own support. Andrea did not provide more than half of her own support. Abigail will not file a joint return with her spouse. • All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability. They lived in the United States all year. Advanced Scenario 4: Test Questions 9. For the purpose of determining dependency, Andrea could be the qualifying child of a. Only Carmen b. Only Abigail c. Either Carmen or Abigail d. Neither Carmen nor Abigail 10. Abigail is eligible to claim Andrea for the earned income credit. a. True b. False
Q1: Hansen bought his primary residence on 1/1/2010 for $400,000. He put $50,000 of his own money as the down payment, and borrowed $350,000 from a bank for the remainder of the purchase price. On 1/1/2021, he was laid off from his job, and he could not make his mortgage payments. On 3/30/2021, the bank foreclosed on the house, and took the house back from Hansen. On 3/30/2021, the house was worth $150,000, and he owed $300,000 to the bank. The bank sold the house for $150,000 which the bank used to pay off half of the $300,000 that Hansen owed. The bank forgave the remaining $150,000 that Hansen owed the bank, pursuant to the foreclosure. In 2021, how much taxable income does Hansen recognize from the bank forgiving the home loan to Hansen? a. $0 b.$150,000 c. $300,000 d. $400,000 Q2. Diamelle purchased a life insurance policy on her life, and named Eric, her husband, as the beneficiary. Diamelle paid $50,000 for the life insurance policy. Upon Diamelle’s death, the life insurance…
Problem 13-85 (LO. 8) Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2020, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2020, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2020. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee 600 Exterminator's certificate 300 Recording fees 800 Mortgage to First Bank 305,000 Cash to seller 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2020, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale.$fill in the blank 89a3d703a067018_1 b. What is Wesley's adjusted basis for the new residence?$fill in the blank…
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Lisa’s Darwin Home Lisa sold her home in Darwin (contract date September 2019, settlementDecember 2019), receiving $1,220,000 at settlement. This is after legal fees($12,000), advertising ($2,000) and real estate commissions ($25,000) werededucted. Records indicate that Lisa purchased the property in 2002 (contract dateJanuary, settlement March) for $653,000. Legal fees, commissions andadvertising of $8,000 were also incurred. Lisa moved in within 6 months, selling her former residence during thattime. Over the ownership period, Lisa rented the property for three yearsbeginning December 2010, with $65,000 of $120,000 in non-capitalcosts claimed against rental income. The property was valued at$890,000 at the time it began being rented. SculptureLisa gave a sculpture, valued at $18,900, to her friend in June 2020. Thesculpture was purchased for $480 in December 2000 and repaired in March2016 for $1,250. VaseWhen Lisa was playing with her cat in September 2019, the cat…
Problem 14-59 (LO 14-5) (Algo) Tamar owns a condominium near Cocoa Beach in Florida. In 2023, she incurs the following expenses in connection with her condo: Insurance. Advertising expense Mortgage interest Property taxes $ 1,330 700 5,700 1,330 750 Repairs & maintenance. Utilities Depreciation 1,030 12,050 During the year, Tamar rented out the condo for 83 days, receiving $15,500 of gross income. She personally used the condo for 53 days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property. Assume Tamar uses the Tax Court method of allocating expenses to rental use of the property. Assume 365 days in the current year. Note: Do not round apportionment ratio. Round all other dollar values to the nearest whole dollar amount. Required: a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo (assuming she itemizes…
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Exercise 13-25 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are $16,030. She sells the property to Kate on April 2, 2021, for $801,500. Kate pays the real property taxes for the entire year on October 1, 2021. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar. a. How much of the property taxes can be deducted by Sally and how much by Kate? Sally can deduct $ 3,997 x and Kate can deduct s Feedback b. What effect does the property tax apportionment have on Kate's adjusted basis in the property? Kate's adjusted basis for the property is increased ✓by the s Feedback 12,033 X of the property taxes. c. What effect does the apportionment have on Sally's amount realized from the sale? Sally paid none of the real property taxes and is realized is increased ✔by this amount. Feedback she paid that is apportioned to Sally. ✔permitted to deduct the apportioned share of s d. How would the answers in…