Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 14, Problem 44P
To determine
Identify whether there is a recognized gain or loss for Person M.
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T1.
Angelina gave a parcel of realty to Julie valued at $167,500 (Angelina purchased the property five years ago for $71,000).
Required:
a. Compute the amount of the taxable gift on the transfer, if any.
b. Suppose several years later Julie sold the property for $174,000. What is the amount of her gain or loss, if any, on the sale?
a. Amount of taxable gift
b. Amount of gain
The Smiths give their daughter, Megan, a parcel of land with an adjusted basis to the Smiths of $22,000. It had a fair market value at the time of the gift of $20,000. No gift tax was due on the transfer. Megan sold the land a couple of years later for $21,000. How much gain or loss does Megan recognize?
Chapter 14 Solutions
Individual Income Taxes
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - LO.1 Taylor is negotiating to buy some land. Under...Ch. 14 - Prob. 6DQCh. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQ
Ch. 14 - Prob. 11DQCh. 14 - Prob. 12DQCh. 14 - Prob. 13DQCh. 14 - LO.4 Marilyn owns land that she acquired three...Ch. 14 - Prob. 15DQCh. 14 - Prob. 16CECh. 14 - Prob. 17CECh. 14 - Prob. 18CECh. 14 - Prob. 19CECh. 14 - Prob. 20CECh. 14 - Heather owns 400 shares of Diego Corporation...Ch. 14 - Prob. 22CECh. 14 - Prob. 23CECh. 14 - Prob. 24CECh. 14 - Prob. 25CECh. 14 - Prob. 26CECh. 14 - Prob. 27CECh. 14 - LO.1 Anne sold her home for 290,000 in 2019....Ch. 14 - Prob. 29PCh. 14 - Prob. 30PCh. 14 - Nissa owns a building (adjusted basis of 600,000...Ch. 14 - Prob. 32PCh. 14 - Prob. 33PCh. 14 - Prob. 34PCh. 14 - Prob. 35PCh. 14 - Yancys personal residence is condemned as part of...Ch. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Kevin purchases 1,000 shares of Bluebird...Ch. 14 - Prob. 40PCh. 14 - Prob. 41PCh. 14 - Prob. 42PCh. 14 - Nicky receives a car from Sam as a gift. Sam paid...Ch. 14 - Prob. 44PCh. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Helene and Pauline are twin sisters who live in...Ch. 14 - Prob. 50PCh. 14 - Prob. 51PCh. 14 - Prob. 52PCh. 14 - Prob. 53PCh. 14 - Prob. 54PCh. 14 - Prob. 55PCh. 14 - Prob. 56PCh. 14 - Alton Newman, age 67, is married and files a joint...Ch. 14 - John Benson, age 40, is single. His Social...Ch. 14 - Prob. 1RPCh. 14 - Prob. 2RPCh. 14 - Prob. 5RPCh. 14 - Prob. 1CPACh. 14 - Prob. 2CPACh. 14 - Prob. 3CPACh. 14 - Prob. 4CPACh. 14 - Prob. 5CPACh. 14 - Prob. 6CPACh. 14 - Prob. 7CPACh. 14 - Prob. 8CPACh. 14 - Prob. 9CPA
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- LO.9 In the current year, Abe gives an interest in a passive activity to his daughter, Andrea. The value of the interest at the date of the gift is 25,000, and its adjusted basis to Abe is 13,000. During the time that Abe owned the investment, losses of 3,000 could not be deducted because of the passive activity loss limitations. What is the tax treatment of the suspended passive activity losses to Abe and Andrea?arrow_forwardLO2 Fatima inherits a rental property with a fair market value of 90,000 from her aunt on April 30. On May 15, the executor of the estate sends her a check for 7,000. A letter accompanying the check states that the 7,000 comes from the rent received on the property since her aunts death. Fatima receives 6,600 in rent on the property during the remainder of the year and pays allow able expenses of 4,200 on the property. How much gross income does Fatima have from these transactions?arrow_forwardDave receives a duplex as a gift from his uncle. The uncle's basis for the duplex and land is $190,000. At the time of the gift, the land and building have fair market values (FMVs) of $51,000 and $119,000, respectively. No gift tax is paid by Dave's uncle at the time of the gift. Read the requirements. Requirement a. To determine gain, what is Dave's basis for the land? (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) To determine gain, Dave's (the donee's) basis for the land is Requirement b. To determine gain, what is Dave's basis for the building? (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) To determine gain, Dave's (the donee's) basis for the building is Requirement c. Will the basis of the land and building be the same as in Parts a and b for purposes of determining a loss? the basis of the land and building the same as in Parts a and b for purposes of…arrow_forward
- Oisha gave a parcel of realty to Julie valued at $197,500 (Oisha purchased the property five years ago for $83,000). a. Compute the amount of the taxable gift on the transfer, if any. b. Suppose several years later Julie sold the property for $204,800. What is the amount of her gain or loss, if any, on the sale? Answer is complete but not entirely correct. $ 182.500 $ 121,800 a. Amount of taxable gift b. Amount of gainarrow_forward7arrow_forward22.Which of the following gifts would probably be taxable to the person receiving the gift? One thousand dollars given to a taxpayer by his or her father An acre of land given to a taxpayer by a friend A car given to a loyal employee by her supervisor when she retired to recognize her faithful service A Mercedes-Benz given to a taxpayer by his cousin An interest in a partnership given to a taxpayer by his or her uncle 24.Hillary gets divorced in 2019 and is required to pay her ex-spouse $200 per month until her son reaches 18 years of age in 7 years and $120 per month thereafter. How much of her 2020 payments are deductible as alimony? $0 $2,400 $1,440 $960arrow_forward
- Karen purchased land valued at $100,000 with virtual currency she had been given by her father who purchased it for $60,000. The virtual currency had a value on the date of the gift equal to $85,000 (i.e., a taxable gift of $69,000) on which he paid a $17,940 gift tax. What income, if any, must Karen recognize as a result of her purchasearrow_forwardBelinda gifts a classic car to her niece Tara. The car's fair market value at the time of gift is $85,000. And Belinda's basis in the car was $44,000. 1) Who is responsible for the gift tax (if applicable)? 2) What is the value of the gift for gift tax purposes? O Belinda; $15,000 Belinda; $85,000 O Belinda; $44,000 O Tara; $85,000arrow_forwardUsing the following independent situations, answer the following questions: Situation # 1 Clara received from her Aunt Sona property with an FMV at the date of the gift of $40,000. Aunt Sona purchased the property five years ago for $35,000. Clara sold What is the basis to Clara? What is Clara's gain on the sale? If Clara is in the 37% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)? If Clara is in the 24% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)? b. d. Situation #2 Clara received from her Aunt Sona property with a FMV at the date of the gift of $30,000. Aunt Sona purchased the property five years ago for S35,000. If Clara sold the property for $43,000, what is her gain or loss on the sale? If Clara sold the property for $33,000, what is her gain or loss on the sale? If Clara sold the property for $28,000, what is her gain or loss on the sale? MFODMarrow_forward
- Dan receives a duplex as a gift from his uncle. The uncle's basis for the duplex and land is $110,000. At the time of the gift, the land and building have FMVS of $64,000 and $96,000, respectively. No gift tax is paid by Dan's uncle at the time of the gift. Read the requirements. Requirement a. To determine gain, what is Dan's basis for the land? (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) To determine gain, Dan's (the donee's) basis for the land is Requirement b. To determine gain, what is Dan's basis for the building? (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) To determine gain, Dan's (the donee's) basis for the building is Requirement c. Will the basis of the land and building be the same as in Parts a and b for purposes of determining a loss? , the basis of the land and building the same as in Parts a and b for purposes of determining a loss becausearrow_forwardMandy and Theo exchange real property in a like-kind exchange. Mandy receives real property with a fair market value of $76,800 and transfers real property worth $53,760 (adjusted basis of $37,632) and cash of $23,040. What is Mandy's realized and recognized gain? If an amount is zero, enter "0". Mandy's realized gain is $ and her recognized gain is $arrow_forwardVoytek transfers land worth $200,000 with an adjusted basis of $17,000 to his wife Gosha for her birthday. The land was purchased 3 years ago. Assume no gift tax was paid on the transfer. a) Does Gosha have gross income as a result of the gift? Yes or No. No? b If the answer is no, Explain why. c)What is Gosha basis in the land? d)What is Gosha holding period in the land?arrow_forward
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