You are the sole owner of a beachfront property in florida consisting of 1 building with 4 housing units and 10 acres of land, of the 10 acres 3 of them are beachfront sand.After a tropical storm the beach front property has suffered from erosion and the beachfront sand diminished by 20%. Your property is now at risk of flooding and is asmaller land size than when you originally bought it. 1. Present these changes and losses in a balance sheet, explain the losses.

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Answered: You are the sole owner of a beachfront…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter17: Property Transactions: § 1231 And Recapture Provisions

Section: Chapter Questions

Problem 1RP

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Moore Furniture Inc. sells retail furniture to the public. Moore recently sold three pieces of property. Use the spreadsheet below to calculate the gain or loss on each of the following dispositions of property, plant, and equipment assets. Place your answer in the space provided. A loss should be indicated by a negative number (enter with a leading minus (-) sign). Note: To use a formula in the spreadsheet, it must be preceded by an equal sign (e.g., =B1+B2).
A homeowner remodeled their kitchen in November 2018. The remodel project included purchasing a high-end residential grade dishwasher with a 10 year useful life expectancy that cost $10,000. The current replacement cost of the dishwasher is $15,000. Breaking news: Last night a fire destroyed the dishwasher. If the homeowner maintains Property coverage on an actual cash value (ACV) basis, how much would they recover from their insurer for the dishwasher? $5,000 $10,000 O $7,500 O $15,000
You use a car in a majority of your sole-proprietorship engineering consulting business. This business asset cost you $80,000 new and has been depreciated according to MACRS over a 5-year period. At the end of year 4, you bought a replacement vehicle and sold the old one on Craigslist.org for $15,000. a) Determine if depreciation recapture or a capital loss is present and, if so, how much. b) If Te = 25% what is the effect on CFAT?. (i.e. increase/decrease and by how much?)
Homeowners 1 2 and 3 live at the end of Homeowners 1, 2, and 3 live at the end of a badly deteriorated road. Fixing the road would cost $C. The value to Homeowner 1 of fixing the road is $3,000, the value to Homeowner 2 is $5,000, and the value to Homeowner 3 is $8,000. Each homeowner claims that fixing the road is not worth much to him, because each wants the others to pay the cost. The local government suspects that the total value to these homeowners of fixing the road is greater than $C and has decided to require the three homeowners to use the VCG mechanism to determine whether to fix the road. Since the government had no idea of the individual values for fixing the road, it decided to allocate the costs equally among the three homeowners. Each homeowner is asked to report his value for fixing the road. If the sum of the reported values is greater than C, the road will be fixed and each homeowner will have to pay $C/3 and also will have to pay an additional tax as…
Jason Thompson purchased an office building 10 years ago for $780,000. The building was just appraised at $1.25 million, what value should be used for the building in Jason accounting records? How did you arrive at your value?
Assume that you recently applied for a student loan to go to graduate school. As part of the appli-cation process, your bank requested a list of your assets. Aside from an extensive CD collection, your only other asset is a pickup truck. You purchased the truck six years ago for $15,000. Its cur-rent fair value is approximately $5,000. a. What factors caused your pickup truck to depreciate $10,000 in value?b. Assume that the bank is willing to lend you money for graduate school. Even with the loan,however, you still need to raise an additional $5,000. Do you think that the bank will lend you$5,000 more for graduate school if you agree to use your truck as collateral? Explain.c. Assume that the truck has been used solely in a delivery service business that you operated while in college. Would your balance sheet necessarily show $10,000 in accumulated depre-ciation related to the truck? Explain.
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Virginia has business property that is stolen and partially destroyed by the time it was recovered. She receives an insurance reimbursement of $6,000 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? $14,000 $8,000 $10,000 $4,000 None of the above

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