None When Barry's grandmother passed away, she gave Barry a diamond ring that was worth $6,000 at the time of death. Barry's grandmother had purchased the ring for $5,400. What isBarry's basis in the ring if he sells it for $7,000? What if he sells it for $5,000? What if he sellsit for $5,800?$fill in the blank 3regardless of sales price

Understanding the Concept of Basis:When property is inherited, the basis (or cost) of the property…

Answered: When Barry's grandmother passed away,…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 32P

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Vijay sells land and receives $5,000 cash, a motorcycle worth $1,600, and two tickets to the Super Bowl with a total face value (cost) of $800 but worth $1,200. In addition, the buyer assumes the mortgage on the land of $12,000. What is Vijay's amount received in this transaction? $5,000 $7,800 $8,200 $19,800 $20,200
Wade paid 7,000 for an automobile that needed substantial repairs. He worked nights and weekends to restore the car and spent 2,400 on parts for it. He knows that he can sell the car for 13,000, but he is very wealthy and does not need the money. On the other hand, his daughter, who has very little income, needs money to make the down payment on a house. a. Would it matter, after taxes, whether Wade sells the car and gives the money to his daughter or whether he gives the car to his daughter and she sells it for 13,000? Explain. b. Assume that Wade gave the car to his daughter after he had arranged for another person to buy it from his daughter. The daughter then transferred the car to the buyer and received 13,000. Who is taxed on the gain?
Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains? O $700,000. Married couples are required to pay capital gains on the final sales price. O $220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid. O $0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property. $0. Capital gains is only paid on commercial properties.
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1 Corinne sells the following personal items in 2021: Necklace: Corinne purchased a necklace for $800 a few years ago and sells it for $1,200 in 2020. Antique Desk: Corinne had an antique desk that she bought a number of years ago for $1,050. In 2021, she was able to sell the desk to an antique dealer for $1,300. Rare Manuscript: Corinne sold a rare manuscript to a museum in 2021 for $1,300. She had acquired it many years ago for $1,800. Bicycle: Corinne sold her beloved mountain bike for $800 in 2021. She had purchased the premium bike a few years Assume Corinne has no other capital gains or losses in 2021. Required: A. Calculate any Taxable Capital Gain or Allowable Capital Loss (enter a 0 if none) that Corinne will include in her 2021 Net Income for Tax Purposes calculation with respect to each item. If the item is Personal Use Property, enter your answer in the PUP column. If the item is Listed Personal Property, enter your answer into the LPP column. Leave any unused squares…
We have Finch Dexter, a 42-year-old head of the family, married with 3 kids. Finch Dexter has a P50, 000.00 loan and P35, 000.00 cash set aside. If Finch passes away, his money might be taken away by his creditors. Since he is the only one with an income, this leaves his family to nothing to survive monetarily. Where would they get money for the expenses for his wake and burial? His kids might also be studying and will be rundown of the needed funds for education. Can all these problems be avoided?
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Q1: Hansen bought his primary residence on 1/1/2010 for $400,000. He put $50,000 of his own money as the down payment, and borrowed $350,000 from a bank for the remainder of the purchase price. On 1/1/2021, he was laid off from his job, and he could not make his mortgage payments. On 3/30/2021, the bank foreclosed on the house, and took the house back from Hansen. On 3/30/2021, the house was worth $150,000, and he owed $300,000 to the bank. The bank sold the house for $150,000 which the bank used to pay off half of the $300,000 that Hansen owed. The bank forgave the remaining $150,000 that Hansen owed the bank, pursuant to the foreclosure. In 2021, how much taxable income does Hansen recognize from the bank forgiving the home loan to Hansen? a. $0 b.$150,000 c. $300,000 d. $400,000 Q2. Diamelle purchased a life insurance policy on her life, and named Eric, her husband, as the beneficiary. Diamelle paid $50,000 for the life insurance policy. Upon Diamelle’s death, the life insurance…
Your evil step-uncle wishes to leave you some of his wealth. You must choose how he wills the money to you. OptionA: He ‘gives’ you $1000.00. He will invest the money on your behalf, at 7.5% per annum, compounded monthly. He will add $1000 to the account at the end of each year. At his death the accumulated sum will pass to you. Option B: He ‘gives’ you $2000.00 per year until he dies. This money is not invested, and the accumulated sum will pass to you at his death. a) If you knew Uncle was going to die in 5 years, which option would you choose? How much money would you inherit from Option A? From Option B? b) If you knew Uncle was going to die in 20 years, which option would you choose? How much money would you inherit from Option A? From Option B?
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