Juliana purchased land three years ago for $79,300. She made a gift of the land to Tom, her brother, in the current year, when the fairmarket value was $111,020. No Federal gift tax is paid on the transfer. Tom subsequently sells the property for $99,918.a. Tom's basis in the land is $and he has a realizedof $on the sale.b. Assume, instead, that the land has a fair market value of $71,370 on the date of the gift, and that Tom sold the land for $67,802.Tom's basis in the land is $and he has a realizedof $on the sale.

First, calculate the realized capital gain for Tom's basis:a. Tom's basis on land is $79,300 (as the…

Answered: Juliana purchased land three years ago…

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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Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $60,200 each. Dexter's basis in each lot sold is $42,140, and he incurs total selling expenses of $2,408 on each sale. What is the amount of Dexter's capital gain and ordinary income?
Determine the taxable gift in each of the following unrelated scenarios:Abram is single and gives $35,000 to each one of his eight grandchildren.Jacob is married and gives $35,000 to each one of his eight grandchildren. He and his wife gift split.In January, Curt sells YTM stock (FMV = $30,000) to Martina for $20,000.David sells a $500,000 real estate property to Joe for $100,000.In the ordinary course of business, Joe sells a diamond ring valued at $30,000 for $15,000 to a customer named Donna.Determine the items exempt from gift tax that were paid by Yancey:College expenses for his son paid directly to the institutionTuition = $20,000Room and Board = $10,000Transfer to Throw Them All Out political party = $3,000College expenses for his daughter paid directly to herTuition = $35,000Room and Board = $10,000Medical expenses for his son = $20,000Medical expenses for his sonâ€™s friend Sergio = $5,000Determine the annual exclusion in each of the following unrelated…
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