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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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.
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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
South-western Federal Taxation 2018: 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 - Prob. 12DQCh. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - Prob. 15DQCh. 15 - Prob. 16CECh. 15 - Prob. 17CECh. 15 - Prob. 18CECh. 15 - Prob. 19CECh. 15 - Prob. 20CECh. 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 - Prob. 57CPCh. 15 - Prob. 1RPCh. 15 - Prob. 2RPCh. 15 - Taylor owns a 150-unit motel that was constructed...Ch. 15 - Prob. 5RPCh. 15 - Prob. 1CPACh. 15 - Chad owned an office building that was destroyed...Ch. 15 - Prob. 3CPACh. 15 - Marsha exchanged land used in her business in...Ch. 15 - Prob. 5CPACh. 15 - Prob. 6CPA
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- 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_forward1.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_forward
- Let us assume that we own our personal residence. Onequestion of interest is, “If we depreciate real property (e.g.,land, buildings, etc.), can we depreciate the house in whichwe live?” Depreciation allows for the recovery of the cost ofdoing business. Since, in most cases, we do not “do business”in our own home, our residence is not a depreciableasset. You can, however, think of some instances in which aperson conducts business at home. Can such a person workingat home depreciate the cost of her house?arrow_forwardMunabhaiarrow_forwardJV, 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_forward
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