Problem 4-8 Sale of a Personal Residence (LO 4.6) On July 1, 2021, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000. Ted's basis in his residence is $50,000. The expenses associated with the sale of his home total $21,000. On December 15, 2021, Ted purchases and occupies a new residence at a cost of $225,000. Calculate Ted's realized gain, recognized gain, and the adjusted basis of his new residence. Realized gain Recognized gain Adjusted basis of the new residence

Problem 4-8 Sale of a Personal Residence (LO 4.6) On July 1, 2021, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000. Ted's basis in his residence is $50,000. The expenses associated with the sale of his home total $21,000. On December 15, 2021, Ted purchases and occupies a new residence at a cost of $225,000. Calculate Ted's realized gain, recognized gain, and the adjusted basis of his new residence. Realized gain Recognized gain Adjusted basis of the new residence

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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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
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Item 5 Xavier bought furniture and fixtures (7-year property) on September 15, 2023, for $1,185,000. He elects to expense as much as possible under Section 179 but does not elect the 100% bonus. Xavier's earned income for the year is $1,200,000. What is the maximum deduction Xavier can take in 2023 for the equipment?
QUESTION 3 On September 30 of last year, Rex received some investment land from Holly as a git. Holly's adjusted basis was $50,000 and the land was valued at $40,000 at the time of the git. Holly acquired the land five years ago. What is the amount of Rex's recognized gain (loss) if he sells the land on May 12 this year at $44,000? QUESTION 4 Franco converted a building from personal to business use in May 2017 when the fair market value was $50,000. He purchased the building in July 2014 for $80,000. On December 15 of this year, Franco sells the building for $39.000. On the date of the sale, the accumulated depreciation on the building was $5,565. What is Franco's recognized gain or loss on the sale?
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…
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QUESTION 30 grandmother. The grandmother did not have any gift taxes due. Two years later. John sold the building for S40,000. What was his gain or (losa) on this transaction O $15,000 Gain O $2,500 Loss O $15,000 Loss O $2,500 Gain O No Gain or Loss
Tonia acquires the following 5-year class property in 2019: Asset Date of Acquisition Cost X January 15 $ 70,000 Y May 28 45,000 Z November 23 90,000 Total $ 205,000 Tonia does not elect §179 or bonus depreciation. Tonia has $300,000 of taxable income from her business. Determine her total cost recovery deduction for the year.
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Exercise 14-22 (LO. 3) Juliana purchased land three years ago for $50,000. She made a gift of the land to Tom, her brother, in the current year, when the fair market value was $70,000. No Federal gift tax is paid on the transfer. Tom subsequently sells the property for $63,000. a. Tom's basis in the land is $ and he has a realized of $ on the sale. b. Assume, instead, that the land has a fair market value of $45,000 on the date of the gift, and that Tom sold the land for $43,000. Tom's basis in the land is $ and he has a realized of $ on the sale.
ESSAY QUESTION NO. 02 Mr. A, 90 years old and suffering from an Stage IV Terminal Lung Cancer, decided to sell for valuable and sufficient consideration a property to his son. After one year, Mr. A unfortunately died. In the settlement of Mr. A's estate, the BIR argued that the house and lot were transferred in contemplation of death and should therefore form part of the gross estate for estate tax purposes. Is the BIR correct?