South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 12, Problem 32P
To determine
Determine AMT adjustment related to mine exploration expenditure and the sale of the land.
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Marcus sold a residential rental building for a gain of $30,000. He had originally purchased the building and placed it in service in March 2016 (for simplicity, the sale of land is not included in this question). The amount of depreciation allowed or allowable was $14,250. There were no other adjustments to the basis of the property, and Marcus did not sell any other property during the tax year. What is the amount and nature of Marcus's gain?
(a) $15,750 gain taxed as a long-term capital gain, and $14,250 gain taxed at a maximum of 25%.
(b) $15,750 gain taxed as a long-term capital gain, and $14,250 gain added to business income.
(c) $30,000 gain taxed as a long-term capital gain, and $14,250 gain taxed at a maximum of 25%.
(d) $30,000 gain taxed as a long-term capital gain, and $14,250 gain added to business income.
Anne sold her home for $290,000 in 2021. Selling expenses were $17,400. She purchased it in 2015 for $200,000. During the period of ownership, Anne had done
the following:
• Deducted $50,500 office-in-home expenses, which included $4,500 in depreciation. (Refer to text Section 9-6a.)
• Deducted a casualty loss in 2017 for residential trees destroyed by a hurricane (her county was declared a Federal disaster area). The total loss was $19,000
(after the $100 floor and the 10%-of-AGI floor), and Anne's insurance company reimbursed her for $13,500. (Refer to text Section 7-3.)
• Paid street paving assessment of $7,000 and added sidewalks for $8,000.
• Installed an elevator for medical reasons. The total cost was $20,000, and Anne deducted $13,000 as medical expenses. (Refer to text Section 10-1b.)
What is the amount that Anne realized on the sale?
What is the adjusted basis of Anne's home?
Anne's realized gain on the sale is $ ?
Tina is a tax resident in Country A. She acquired the following assets in 2017:
(a) two houses located in Country A. The cost of each house was $10 million.
(b) a house located in Country B. The cost of the house was $25 million.
(C) a motor vehicle for $3 million.
(D) a painting. She paid $2.5 million.
(E) Government bond issued by Country A for $500,000.
In 2021, she disposed of all the properties and received the following disposal proceeds:
Painting - $1million
House in Country A - $25 million each
House in Country B - $35 million
Motor vehicle $3.5 million
Government bond- $1 million.
In Country A, full tax relief is available for the principal place of residence. An annual exemption of $500,000 is also available.
Tina incurred agency fees of $180,000 and $100,000 on the disposal of the houses located in Country A and Country B respectively.
Prior to disposing of the house in Country B, she incurred repair expenses of $2 million. Tina also incurs monthly maintenance…
Chapter 12 Solutions
South-western Federal Taxation 2018: Individual Income Taxes
Ch. 12 - Kelly was promoted and received a substantial...Ch. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Can any nonrefundable credits, other than the...Ch. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - Prob. 16DQCh. 12 - Prob. 17DQCh. 12 - During the year, Rachel earned 18,000 of interest...Ch. 12 - Prob. 19CECh. 12 - Prob. 20CECh. 12 - Prob. 21CECh. 12 - Prob. 22CECh. 12 - Prob. 23CECh. 12 - Prob. 24CECh. 12 - Prob. 25CECh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Lisa records nonrefundable Federal income tax...Ch. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Prob. 36PCh. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - Prob. 42PCh. 12 - Prob. 43PCh. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Prob. 48PCh. 12 - Prob. 49PCh. 12 - Prob. 50PCh. 12 - Prob. 51PCh. 12 - Prob. 52PCh. 12 - Prob. 53PCh. 12 - Prob. 54CPCh. 12 - Prob. 55CPCh. 12 - Prob. 2RPCh. 12 - Prob. 3RPCh. 12 - Prob. 1CPACh. 12 - Prob. 2CPACh. 12 - Carol reports taxable income of 48,000. Included...Ch. 12 - Prob. 4CPA
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