Question:Turquoise Realty Company owns an apartmenthouse that has an adjusted basis of $760,000but is subject to a mortgage of $192,000.Turquoise transfers the apartment house toDove, Inc., and receives from Dove $120,000 incash and an office building with a fair marketvalue of $780,000 at the time of the exchange.Dove assumes the $192,000 mortgage on theapartment house.Turquoise's realized gain is:

Step 1: Calculation of Turquoise's Realized Gain.Fair market value of old building received…

Answered: Question: Turquoise Realty Company owns…

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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Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Required:b. What is the character of this gain?c. How would your answers change if Lynn was a noncorporate business?
Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Requiredc. How would your answers change if Lynn was a noncorporate business?
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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
am. 117.
A corporation sells property (basis of $750,000) to its sole shareholder for $450,000, the fair market value of the property. With respect to the sale: MPC Corporation makes a property distribution on 12/31/16 to its sole shareholder, Jon. The property distributed is a house (fair market value of $400,000; basis of $300,000) that is subject to a $150,000 mortgage that Jon assumes. Before considering the consequences of the distribution, MPC’s current E & P before the distribution is $175,000 and its accumulated E & P is $100,000. MPC makes no other distributions during the current year. What is MPCs taxable gain on the distribution of the house? What is MPC’s current E&P after the distribution on 12/31/16? What is Jon’s taxable gain (if any) and what type of gain is it? What is Jon’s basis in the house?
Alpesh
Malik Edson has the following assets: • Land with ACB of $60,000 Building with a cost of $105,000, and UCC of $79,000. Malik sells both of land and building in a single transaction for $219,000. The estimated FMV of each was: • Land: $146,000 • Building: $73,000 How much capital gain and terminal loss will Malik realize on this transaction? Choose the correct answer. A. capital gain of $73,000, terminal loss of $32,000 B. capital gain of $73,000, terminal loss of $6,000 C. capital gain of $54,000, terminal loss of $0 D. capital gain of $80,000, terminal loss of $0
Postum Partnership purchases a building in 2017 for $250,000. It deducts $5,600 in depreciation on the building in 2017, $6,400 in 2018, $6,400 in 2019, and $3,200 in 2020. It sells the building in 2020 for $260,000. What is the part-nership’s gain or loss on the sale of the building?
Before any debt cancellation, PeppersCo holds business land with a $2,400,000 fair market value, a $1,000,000 tax basis, and a related mortgage of $3,000,000. The lender reduces the mortgage principal by $600,000. What are the Federal income tax consequences of the debt cancellation given the following independent scenarios? A, Peppers is insolvent, and the land and related mortgage are the only asset and debt, respectively. B. the mortgage is seller financing, and Peppers is solvent. C. Peppers has filed for bankruptcy and the debt is discharged by that action.

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