On November 5, 2020, BLUE Company purchased a land and a building for a lump-sum amount of ₱5,500,000 from TEAL Corporation. The land was purchased by TEAL last October of 2005 for ₱1,750,000, and the building was constructed on February of 2006 for ₱4,000,000. The fair values of the land and building on the date of acquisition are ₱1,100,000 and ₱1,650,000, respectively. How much is allocated to land and building upon initial recognition of BLUE? A. LAND - ₱ 2,200,000; BUILDING = ₱3,300,000
On November 5, 2020, BLUE Company purchased a land and a building for a lump-sum amount of ₱5,500,000 from TEAL Corporation. The land was purchased by TEAL last October of 2005 for ₱1,750,000, and the building was constructed on February of 2006 for ₱4,000,000. The fair values of the land and building on the date of acquisition are ₱1,100,000 and ₱1,650,000, respectively. How much is allocated to land and building upon initial recognition of BLUE? A. LAND - ₱ 2,200,000; BUILDING = ₱3,300,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges
Section: Chapter Questions
Problem 1BD
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On November 5, 2020, BLUE Company purchased a land and a building for a lump-sum amount of ₱5,500,000 from TEAL Corporation. The land was purchased by TEAL last October of 2005 for ₱1,750,000, and the building was constructed on February of 2006 for ₱4,000,000. The fair values of the land and building on the date of acquisition are ₱1,100,000 and ₱1,650,000, respectively. How much is allocated to land and building upon initial recognition of BLUE?
A. LAND - ₱ 2,200,000; BUILDING = ₱3,300,000
B. LAND - ₱ 2,750,000; BUILDING = ₱2,750,000
C. LAND - ₱ 2,750,000; BUILDING = ₱ 0
D. LAND - ₱ 0; BUILDING =₱5,500,000
E. LAND - ₱ 1,673,913; BUILDING = ₱3,826,087
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