Ron's building, which was used in his business, was destroyed in a fire.Ron's adjusted basis in the building was $210,000, and its FMV was$330,000. Ron filed an insurance claim and was reimbursed $300,000. Inthat same year, Ron invested $240,000 of the insurance proceeds in anotherbusiness building. Ron will recognize the gain of:a. $30,000b. $0c. $60,000d. $90,000

We determine the gain Ron will recognize from the insurance reimbursement. For this, we need to…

Answered: Ron's building, which was used in his…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges

Section: Chapter Questions

Problem 6BCRQ

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Similar questions

Oscar owns a building that is destroyed in a hurricane. His adjusted basis in the building before the hurricane is $130,000. His insurance company pays him $140,000 and he immediately invests in a new building at a cost of $142,000. What is the amount of recognized gain or loss on the destruction of Oscar's building? $0 $10,000 gain $8,000 gain $12,000 gain $2,000 loss
Chad owned an office building that was destroyed in a tornado. The area was declared a Federal disaster area. The adjusted basis of the building at the time was 890,000. After the deductible, Chad received an insurance check for 850,000. He used the 850,000 to purchase a new building that same year. How much is Chads recognized loss, and what is his basis in the new building?
John owns a second home in Palm Springs, CA. During the year, he rented the house for $5,000 for 56 days and used the house for 14 days during the summer. The house remained vacant during the remainder of the year. The expenses for the home included $5,000 in mortgage interest, $850 in property taxes, $900 for utilities and maintenance, and $3,500 of depreciation. What is John's deductible rental loss, before considering the passive loss limitations? $200 $875 $2,500 $3,200 $0
Tyson owns a condominium near Laguna Beach, California. This year, he incurs the following expenses inconnection with his condo:Insurance $ 1,000Mortgage interest 7,500Property taxes 3,200Repairs and maintenance 800Utilities 1,700Depreciation 5,700During the year, Tyson rented the condo for 100 days, receiving $25,000 of gross income. He personallyused the condo for 60 days. Assume Tyson uses the Tax Court method of allocating expenses to rental useof the property. Tyson itemizes deductions, and the sum of his itemized deduction for non-home businesstaxes and the real property taxes allocated to rental use of the home is less than $10,000. What is Tyson'snet rental income for the year (assume this is not a leap year)?
Please solve in accounts
Equipment that Kevin used in his business was completely destroyed in a fire. At the time of the fire, the equipment had a fair market value of $40,000 and an adjusted basis of $36,000. He received an insurance recovery of $16,000. If Kevin’s AGI for the year is $100,000, determine his deductible loss on the equipment. Options: a.) $20,000 b.) $9,900 c.) $24,000 d.) $0 e.) $40,000
Becky purchased a P1,500,000 life insurance policy for P100,000. During the year, Becky died and her heirs collected the entire proceeds. How much of the proceeds is exempt from income tax? * a. P1,500,000 O b. P1,400,000 c. P100,000
Mrs. V paid the following expenditures in the current year. Interest on line of credit ($20,000 outstanding for the entire year) $1,000 Investment management fees for her registered retirement savings plan 6,000 Investment management fees for her non-registered investments 800 Legal fees related to the acquisition of a rental property 1,200 The line of credit is mostly for the purchase of non-registered investments, made several years ago. All of the investments are still owned. However, $5,000 of the total outstanding principal was used to renovate her home last year. The rental property was purchased late in the year. No rental income was received in the year. What is the total amount that she can deduct on her personal income tax return for the current year, in respect of these expenditures? A. 1,550 B. 1,800 C. 2,750 D. 3,000
Mrs. V paid the following expenditures in the current year. Interest on line of credit ($20,000 outstanding for the entire year) Investment management fees for her registered retirement savings plan Investment management fees for her non-registered investments Legal fees related to the acquisition of a rental property $1,550 $1,000 The line of credit is mostly for the purchase of non-registered investments, made several years ago. All of the investments are still owned. However, $5,000 of the total outstanding principal was used to renovate her home last year. O $1,800 6,000 The rental property was purchased late in the year. No rental income was received in the year. O $2,750 800 What is the total amount that she can deduct on her personal income tax return for the current year, in respect of these expenditures? O $3,000 1,200
2. Jordan has some damages on his business property when tornado hit his area. Her truck was used 100 percent for business use in her sole proprietorship. The truck had originally cost $35,000 and she had taken $5,000 depreciation. At the time of the disaster, it was worth $25,000. After the accident, it was $0. She received insurance company's payment of $20,000. How much is her deducible casualty loss? What is her deductible casualty loss if the truck's residual value was $5,000? 3. Fill in the blanks on the following like-kind exchanges Boot FMV of Adjusted basis of given new asset old asset a. b. 17000 15000 4000 C. d. 16000 e. 7000 0 0 6000 0 0 14000 29000 8000 28000 12000 Boot Realized received Gain/(loss) 0 0 500 0 4000 Recognized Postponed gain/loss Gain/loss New basis of received property
Hello, I need help solving this accounting problem.
Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $5,000 on property that had a $14,000 basis and a decrease in market value of $10,000 due to damage caused by the theft. What is the amount of Virginia's casualty loss? a.$4,000 b.$5,000 c.$14,000 d.$10,000 e.None of these choices are correct.

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