Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, a sculpture was sold at auctions for a price of $10,316,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,373,500. What was his annual rate of return on this sculpture?

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, a sculpture was sold at auctions for a price of $10,316,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,373,500. What was his annual rate of return on this sculpture?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter17: Property Transactions: § 1231 And Recapture Provisions

Section: Chapter Questions

Problem 11DQ

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Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2015 was $2,800,000. The fair market value six months later was $2,850,000. What is the basis of the property to Ed? What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?
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