Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 8, Problem 20P
a
To determine
Introduction: When exchange of property takes place between taxpayers, the gain or loss on such exchange is
The recognized gain, if any, on the exchange.
b
To determine
Introduction:When exchange of property takes place between taxpayers, the gain or loss on such exchange is deferred for tax purposes. Under some situations for exchange of real property, the transactions may be non-taxable. To qualify for such non-taxability, the property must be sued in a trade or business or for investment.
The basis in the property received
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Students have asked these similar questions
Reese 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 Tax
During the current year, Ethel exchanges a business land for different business land in a like-kind exchange. Ethel's adjusted basis in the land given up is $7,000, and she receives a land worth $13,000 plus $3,000 cash.
a.
Calculate the amount of gain realized by Ethel on the exchange.
b.
Calculate the amount of the gain that must be recognized by Ethel on the transaction.
Theresa 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 $11,000
Chapter 8 Solutions
Income Tax Fundamentals 2020
Ch. 8 - Alice purchases a rental house on August 22,2019,...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - James purchased office equipment for his business....Ch. 8 - Which of the following statements with respect to...Ch. 8 - Which of the following is not true about the MACRS...Ch. 8 - On July 20,2019, Kelli purchases office equipment...Ch. 8 - Which of the following is not considered a limit...Ch. 8 - In 2019, Ben purchases and places in service a new...Ch. 8 - In 2019, Ben purchases and places in service a new...
Ch. 8 - Prob. 11MCQCh. 8 - Prob. 12MCQCh. 8 - Prob. 13MCQCh. 8 - In 2019, Mary sells for $24,000 a machine used in...Ch. 8 - Prob. 15MCQCh. 8 - Prob. 16MCQCh. 8 - Virginia has business property that is stolen and...Ch. 8 - Pat sells land for $25,000 cash and a $75,000...Ch. 8 - Prob. 19MCQCh. 8 - Prob. 20MCQCh. 8 - Oscar owns a building that is destroyed in a...Ch. 8 - Prob. 22MCQCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - 3. Mike purchases a new heavy-duty truck (5-year...Ch. 8 - On March 8,2019, Holly purchased a residential...Ch. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Calculate the following: The first year of...Ch. 8 - During 2019, William purchases the following...Ch. 8 - On February 2,2019, Alexandra purchases a personal...Ch. 8 - On September 14,2019, Jay purchased a passenger...Ch. 8 - Tom has a successful business with $100,000 of...Ch. 8 - Prob. 14PCh. 8 - Annie develops a successful tax practice. She...Ch. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21P
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