Lance contributed investment property worth $690,000, purchased two years ago for $277,500 cash, to Cloud Peak LLC in exchange for an 85 percent profits and capital interest in the LLC. Cloud Peak owes $505,000 to its suppliers but has no other liabilities. E. What is Cloud Peak's basis in the contributed property? Basis

Lance contributed investment property worth $690,000, purchased two years ago for $277,500 cash, to Cloud Peak LLC in exchange for an 85 percent profits and capital interest in the LLC. Cloud Peak owes $505,000 to its suppliers but has no other liabilities. E. What is Cloud Peak's basis in the contributed property? Basis

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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Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would prefer to build on the other's land. Accordingly, they agree to exchange their land, and have the following information: Harglo's Kalman's Land Land Cost and book value $150,000 $100,000Fair value based upon appraisal $200,000 $160,000 The exchange of land was made, and, based on the difference in appraised fair value, Kalman paid $40,000 cash to Harglo. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount of $6,000 After the exchange, Harglo would record its newly acquired land on its books ata. $120,000b. $102,000c. $136,000d. $166,000
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Cayden Purchased the following for his rental real estate business: An apartment building; he paid $103,500 for the building ( not including the value of the land). Furniture for $8,649. Pickup truck for $27,500, used for 75% business. What is Cayden's total unadjusted basis immediately after acquisition (UBIA) of these assets? 1) $29,274 2) $112,149 3) $132,774 4) $139,649
Answer
In a like - kind exchange, Greyland exchanged investment - use real property (FMV $210,000, adjusted basis $190,000) for a smaller piece of investment - use property (FMV $200,000) plus $10,000. They will report a $10,000 gain on the exchange. What is their basis in the replacement property? $170,000 $180,000 $190,000 $200,000
Why is this not 71,800? What's the real answer?
am. 117.
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