Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 30P
a.
To determine
Compute Ms. S’s recognized gain or loss and basis for the land and building and equipment acquired from Mr. T.
b.
To determine
Compute Mr. T’s recognized gain or loss and basis for the land and building and equipment acquired from Mrs. S.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Valerie exchanges a building and land (used in her business) for Vanessa’s land and building and some equipment (used in her business). The assets have the following values: Provide the final answers to the questions below. Show your work.
Adjusted Basis
Fair Market Value
Valerie's real property
$9,760
$24,400
Vanessa's real property
$4,880
$19,520
Equipment
$4,392
$7,320
What are Valerie’s recognized gain or loss and basis for the land and building and equipment acquired from Vanessa?
What are Vanessa's recognized gain or loss and basis for the land and building acquired from Valerie?
Given Valerie’s gain/loss and the potential tax implications, do you recommend she makes this exchange?
Sarah exchanges a building and land (used in its business) for Tyler's land and building and some equipment (used in its business). The
assets have the following characteristics:
Adjusted Basis Fair Market Value
Sarah's real property
$3,600
$9,000
Tyler's real property
1,800
7,200
Equipment
1,620
2,700
a. What are Sarah's recognized gain or loss and basis for the land and building and equipment acquired from Tyler?
Her adjusted basis in the land and building she acquired from Tyler is $
Her recognized
is $
and her
adjusted basis in the equipment is $
b. What are Tyler's recognized gain or loss and basis for the land and building acquired from Sarah?
is $
Tyler's recognized
and his adjusted basis in the land and building he acquired from Sarah is
Problem 13-66 (LO. 4)
Surendra's personal residence originally cost $340,000 (ignoring the value of the land). After
living in the house for five years, he converts it to rental property. At the date of conversion,
the fair market value of the house is $320,000.
a. Surendra's basis for loss for the rental property is $
b. Surendra's basis for depreciation for the rental property is $
c. Surendra's basis for gain for the rental property is $
d. Could Surendra have obtained better tax results if he had sold his personal residence for
$320,000 and then purchased another house for $320,000 to hold as rental property?
e. Complete the letter below regarding an e-mail to your instructor.
TO:
Instructor
FROM: Student
DATE: January 6, 2021
The purpose of this e-mail is to address the tax issues associated with Surendra's
conversion of his principal residence into a rental property. I am basing my
conclusions on the information provided.
The original cost (and adjusted basis at the time of the…
Chapter 15 Solutions
Individual Income Taxes
Ch. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - LO.2 Melissa owns a residential lot in Spring...Ch. 15 - LO.2 Ross would like to dispose of some land he...Ch. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQ
Ch. 15 - Prob. 11DQCh. 15 - LO.3 Reba, a calendar year taxpayer, owns an...Ch. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - Prob. 15DQCh. 15 - Prob. 16CECh. 15 - Prob. 17CECh. 15 - Prob. 18CECh. 15 - Prob. 19CECh. 15 - LO.3 On June 5, 2019, Brown, Inc., a calendar year...Ch. 15 - LO.3 Camilos property, with an adjusted basis of...Ch. 15 - Prob. 22CECh. 15 - Prob. 23CECh. 15 - Prob. 24CECh. 15 - Prob. 25CECh. 15 - Prob. 26CECh. 15 - Prob. 27PCh. 15 - Prob. 28PCh. 15 - Prob. 29PCh. 15 - Prob. 30PCh. 15 - Prob. 31PCh. 15 - Prob. 32PCh. 15 - Prob. 33PCh. 15 - Ed owns investment land with an adjusted basis of...Ch. 15 - Prob. 35PCh. 15 - Prob. 36PCh. 15 - Prob. 37PCh. 15 - Prob. 38PCh. 15 - Prob. 39PCh. 15 - Prob. 40PCh. 15 - LO.3 Howards roadside vegetable stand (adjusted...Ch. 15 - Prob. 42PCh. 15 - Prob. 43PCh. 15 - Prob. 44PCh. 15 - Prob. 45PCh. 15 - Prob. 46PCh. 15 - What are the maximum postponed gain or loss and...Ch. 15 - Prob. 48PCh. 15 - Prob. 49PCh. 15 - Prob. 50PCh. 15 - Prob. 51PCh. 15 - Prob. 52PCh. 15 - Prob. 53PCh. 15 - Prob. 54PCh. 15 - Prob. 55PCh. 15 - Prob. 56PCh. 15 - Devon Bishop, age 45, is single. He lives at 1507...Ch. 15 - Prob. 1RPCh. 15 - Prob. 2RPCh. 15 - Taylor owns a 150-unit motel that was constructed...Ch. 15 - Prob. 6RPCh. 15 - Prob. 1CPACh. 15 - Susie purchased her primary residence on March 15,...Ch. 15 - Chad owned an office building that was destroyed...Ch. 15 - Prob. 4CPACh. 15 - Marsha exchanged land used in her business in...Ch. 15 - Prob. 6CPACh. 15 - Prob. 7CPA
Knowledge Booster
Similar questions
- Sarah exchanges a building and land (used in her business) for Tyler's land and building and some equipment (used in his business). The assets have the following characteristics: Adjusted Basis Fair Market Value Sarah’s real property $120,000 $300,000 Tyler’s real property 60,000 220,000 Equipment 50,000 80,000 a. What are Sarah’s recognized gain or loss and basis for the land and building and equipment acquired from Tyler? b. What are Tyler’s recognized gain or loss and basis for the land and building acquired from Sarah?arrow_forwardIf property is inherited by a taxpayer, a.To the recipient, the basis for the property is the same as the basis to the decedent. b.At sale date, the basis of the property to the recipient differs depending on whether the property was sold at a gain or a loss. c.At sale date, the recipient will not have a gain or loss even if the recipient has held the property for more than a year. d.In general, the basis to the recipient is the fair market value at the decedent's date of death.arrow_forward1.arrow_forward
- Jennifer transfers properties to Mump Co. in an exchange that meets all the requirements of Code Sec. 351. Several of the transferred properties are subject to liabilities. Will property transfers of this sort cause gain recognition for Jennifer?arrow_forwardElaine exchanges a lot of land that is used exclusively for business purposes for another lot that also is to be used exclusively for business. The adjusted basis for the old lot is $19,750, and its FMV is $15,750. Required: Calculate Elaine’s recognized gain or loss on the exchange. (If no gain or loss is recognized, select "No gain/loss".) Calculate Elaine’s basis for the lot she receives.arrow_forwardMunabhaiarrow_forward
- JV, owner of a parcel of land, sold it to PP. But the deed of sale was not registered. One year later, JV sold the parcel again to RR, who succeeded to register the deed and to obtain a transfer certificate of title over the property in his own name. Who has a better right over the parcel of land, RR or PP? Why? Explain the legal basis for your answer.arrow_forward1. Kelly exchanges land (adjusted basis of $75,000; fair market value of $62,000) used in her business and common stock held for investment (adjusted basis of $8,000; fair market value of $12,000) for a single parcel of land (fair market value of $74,000) to be used in her business in a like-kind exchange. Determine her basis for the land she exchanges.arrow_forwardTheresa Perry exchanged her investment-use real property for a larger piece of investment-use property. At the time of the exchange, the fair market value (FMV) of the property she traded was $55,000, and her adjusted basis in this property was $27,000. She also provided $11,000 cash. In the exchange, she received investment-use property with an FMV of $66,000.What is Theresa's gain realized and the gain recognized on the exchange? $0 and $28,000 $11,000 and $38,000 $28,000 and $0 $38,000 and $11,000arrow_forward
- 1. According to the article by Tony Dimitriadis (see Supplementary Study Materials Folder), whether an amount received by a taxpayer following the sale of a capital asset (e.g. real estate) will be treated as capital or income depends largely on: Select one: The intention of the taxpayer when the property was first acquired The degree of renovation and development carried out on the property Whether the taxpayer held on to the property, rather than making a short term profit Whether the taxpayer is an individual or a business taxpayer All of the above are important considerations 2. Select the INCORRECT statement from the following options: Select one: The Cost Base of Personal Use Assets excludes Element 3 expenses (Ownership Costs) An antique vase bought at a garage sale for $200 and sold for $20,000 is exempt from CGT The indexation rate for assets acquired on 2 February 1986 was 41.4 All costs incurred under Element 3 (Ownership Costs) should be included in the indexation…arrow_forwardGeraldine Berry exchanged her investment use real property for a larger piece of investment use property. At the time of the exchange, the fair market value of the property she traded was $45000 and her adjusted basis in this property was $2400. She also provided $8000 cash. In the exchange, she received investment use property with a fair market value of $53000. What is Geraldines gain realized and the gain recognized on the exchange.arrow_forwardIn which of the following circumstances would the property be deemed to have been disposed of? a. Property sold to a third party. b. Property gifted to another person or charity. c. Property expropriated by a government agency. d. Property redeemed by the issuer, such as bonds or shares.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT