Brian owns a duplex used as rental property. The duplex has a basis of $84,000 and $380,000 FMV. He transfers the duplex to Carrie,his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange, Carrie sells the duplex to a business associate for $395,000. Requirements Determine: a. Brian's realized and recognized gain on the exchange. b. Carrie's realized and recognized gain on the exchange. Requirement a. Determine Brian's realized and recognized gain on the exchange. Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain. Amount realized (Brian) - Adjusted basis (duplex) = Realized gain $380,000 - $84,000 = $296,000 Determine Brian's recognized gain on the exchange. The recognized gain is $ .
Brian owns a duplex used as rental property. The duplex has a basis of $84,000 and $380,000 FMV. He transfers the duplex to Carrie,his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange, Carrie sells the duplex to a business associate for $395,000. Requirements Determine: a. Brian's realized and recognized gain on the exchange. b. Carrie's realized and recognized gain on the exchange. Requirement a. Determine Brian's realized and recognized gain on the exchange. Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain. Amount realized (Brian) - Adjusted basis (duplex) = Realized gain $380,000 - $84,000 = $296,000 Determine Brian's recognized gain on the exchange. The recognized gain is $ .
Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges
Section: Chapter Questions
Problem 64P
Related questions
Question
100%
Brian owns a duplex used as rental property. The duplex has a basis of
$84,000 and $380,000 FMV. He transfers the duplex to Carrie,his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange, Carrie sells the duplex to a business associate for $395,000.
Requirements
Determine:
|
a.
|
Brian's
realized and recognized gain on the exchange. |
|
b.
|
Carrie's
realized and recognized gain on the exchange. |
Requirement a. Determine
Brian's realized and recognized gain on the exchange.
Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain.
|
|
Amount realized (Brian)
|
-
|
Adjusted basis (duplex)
|
=
|
Realized gain
|
|
$380,000
|
-
|
$84,000
|
=
|
$296,000
|
Determine
Brian's recognized gain on the exchange.
|
The recognized gain is $
|
.
|
Expert Solution
Step 1Introduction
Suppose that there is no boot involved. A like-kind exchange is not taxable; that is, there is no recognized gain or loss to both parties on the exchange. The basis of a property received is equal to the basis of the property relinquisned_ The holding period of a property received is exactly the holding period of the property relinquished. In an exchange, realized gain is determined by subtracting the basis of the property relinquished from the fair market value (FMV) of the property received.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT