Michael sold a building he purchased six months earlier for use in his business. His cost and adjusted basis in the building is $120,000. He incurred selling expenses of $8,000. The buyer paid $95,000 cash and assumed Michael's $45,000 mortgage on the property. What is the amount of his gain, and where on Form 4797 will he report the sale? a) $12,000 on Part I b) $12,000 on Part II c) $20,000 on Part I d) $20,000 on Part II
Michael sold a building he purchased six months earlier for use in his business. His cost and adjusted basis in the building is $120,000. He incurred selling expenses of $8,000. The buyer paid $95,000 cash and assumed Michael's $45,000 mortgage on the property. What is the amount of his gain, and where on Form 4797 will he report the sale? a) $12,000 on Part I b) $12,000 on Part II c) $20,000 on Part I d) $20,000 on Part II
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 36P
Related questions
Question
Quick answer of this accounting question
Transcribed Image Text:Michael sold a building he purchased six months earlier for use in his
business. His cost and adjusted basis in the building is $120,000. He incurred
selling expenses of $8,000. The buyer paid $95,000 cash and assumed
Michael's $45,000 mortgage on the property. What is the amount of his gain,
and where on Form 4797 will he report the sale?
a) $12,000 on Part I
b) $12,000 on Part II
c) $20,000 on Part I
d) $20,000 on Part II
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT