Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 36P
a.
To determine
Compute Mr. S’s realized and recognized gain on sale of the land that sold to Mr. A.
b.
To determine
Determine Mr. S’s basis for the land purchased from Mr. J.
c.
To determine
Explain the factors that motivate Mr. S to sell land to Mr. A and purchase the land from Mr. J instead of exchange of one parcel for the other.
d.
To determine
Determine Mr. S’s realized & recognized gain on sale and basis for the land, if the adjusted basis of original parcel of land is $15,000 and fair market value is $12,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Steve owns real estate (adjusted basis of $12,000 and fair market value of $15,000), which he uses in his business. Steve sells the real estate for $15,000 to Aubry (a dealer) and then purchases a new parcel of land for $15,000 from Joan (also a dealer). The new parcel of land would normally qualify as like-kind property.
Steve owns real estate (adjusted basis of $12,000 and fair market value of $15,000), which he uses in his business. Steve sells the real estate for $15,000 to Aubry (a dealer) and then purchases a new parcel of land for $15,000 from Joan (also a dealer). The new parcel of land qualifies as like-kind property.
Assume that the adjusted basis of Steve’s original parcel of land is $15,000 and the fair market value of both parcels of land is $12,000. Respond to parts (a) through (c).
Which of the following taxpayers would be most likely to benefit from an installment sale?
(a) Allan. He sold a business-use car at a net gain that was less than the amount of depreciation claimed.
(b) Kayla. She sold business-use land for a gain.
(c) Marie. She sold property she had held in inventory in her business at a net gain.
(d) Robert. He sold a fishing boat at a net loss.
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
- Your client has a real estate asset used in his business. He exchanges it for a like-kind real estate asset owned by Ava. The basis of your client's asset is $50,000 and he gives Ava $25,000 cash plus the asset in exchange for Ava's asset, which is worth $40,000. Ava's basis in her original asset is $9,000. What is Ava's gain or loss? A. $25,000 gain recognized. $31,000 gain realized and recognized. C. $0 gain recognized. D. $0 loss recognized.arrow_forwardaRhonda owns an office building that has an adjusted basis of $45,000. The building is subject to a mortgage of $20,000. She transfers the building to Miguel in exchange for $15,000 cash and a warehouse with an FMV of $50,000. Miguel assumes the mortgage on the building. Required: What are LaRhonda’s realized and recognized gain or loss? What is her basis in the newly acquired warehouse?arrow_forwardPatrick owns a building used in his business with an adjusted basis of $300,000 and a $875,000 FMV. He exchanges the building for a building owned by Danny. Danny's building has a $1,000,000 FMV but is subject to a $125,000 liability. Patrick assumes Danny's liability and uses the building in his business. Read the requirements. Requirement a. What is Patrick's realized gain? The realized gain is Requirement b. What is Patrick's recognized gain? (If there is no recognized gain, make sure to enter "0" in the appropriate cell.) The recognized gain is Requirement c. What is Patrick's basis for the building received? Patrick's basis for the building received isarrow_forward
- Dave 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_forwardReese and Jake engage in a like-kind exchange. Reese transfers real estate with a fair market value of $500,000 and an adjusted basis of $200,000 to Jake. Jake transfers real estate worth $700,000 and an adjusted basis of $250,000, plus a $200,000 mortgage on the property, to Reese. What is Jake's potential or deferred gain before and after the transaction? $450,000 potential gain before the transaction; $50,000 potential gain after the transaction. $250,000 potential gain before the transaction; $50,000 potential gain after the transaction. $450,000 potential gain before the transaction; $250,000 potential gain after the transaction. $250,000 potential gain before the transaction; $200,000 potential gain after the transaction. Income Taxarrow_forwardMaria owns depreciable residential rental real estate that has accumulated depreciation of $65,000 (all from straight-line) . If Maria sold the property, she would have a $53,000 gain. The initial characterization of the gain would be: a.Section 1239 gain. b.Section 1250 gain. c.Section 1245 gain. d.Section 1231 gain.arrow_forward
- Isaac buys a piece of land as an investment, paying $20,000. Three years later he trades the land to Isadore for a piece of land worth $26,000. Isaac holds the new land as an investment 1) What is Isaac’s adjusted basis in the new property he receives? 2) What is Isaac’s holding period in the new land he receives?arrow_forwardAngelina 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 gainarrow_forwardLily exchanges land used in her business for a different parcel of land to be used in her business. Her adjusted basis for the land is $325,000 and the fair market value is $310,000. The fair market value of the new parcel of land is $300,000. In addition, Lily receives cash of $10,000. Calculate Lily’s realized and recognized gain or loss and her adjusted basis for the assets received.arrow_forward
- Charles exchanged land used in his business plus 26,000 in cash for like-kind real estate. Charles had an adjustment basis in the land of 27,000 and its fair value was 32,000 at the date of exchange. the new property that Charles received had a fair value of 58,000. What is Charles's recognized gain on this exchange and his tax basis of the new property he received?arrow_forwardLisa sells business property with an adjusted basis of $168,800 to her son, Alfred, for its fair market value of $135,040. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $ realized of which $ b. What is Alfred's recognized gain or loss if he subsequently sells the property for $185,680? For $109,720? If Alfred sells the property for $185,680, he has a recognized is recognized. If Alfred sells the property for $109,720, he has a recognized of $arrow_forwardRafael sold an asset to Jamal. What is Rafael's amount realized on the sale in each of the following alternative scenarios? c. Rafael received $20,000 cash, a parcel of land worth $50,000, and marketable securities of $10,000. Rafael also paid a commission of $8,000 on the transaction.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