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).

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A:

Q: Bob owned a duplex used as rental property.  The duplex had an adjusted basis to Bob of $86,000 and…

A: Given information:   Fair Market Value - $300,000 The sale price of the duplex - $312000

Q: June and Henry Martin, a married couple, purchased property jointly for $200,000 ten years before…

A: In this question, we have been given two values of the property and the married couple who bought…

Q: Should Jorge close the sale of Activity A with Juanita this year, or should he wait until next year…

A: Income tax expense:   The expenses which are related to the taxable income of the individuals and…

Q: .  Bob owned a duplex used as rental property.  The duplex had an adjusted basis to Bob of $86,000…

A: Given information:   Adjusted basis - $279,000 Fair Market Value - $300,000

Q: Dimas owns a parcel of land worth P5,000,000 based on the fair valuation in 2020. He inherited from…

A: Dimas owns a parcel of land. Based on the fair value of land = P5000000 He inherited from his father…

Q: Rachelle owned land with a basis of $200,000, subject to a mortgage of $125,000.  She exchanged the…

A: Lets understand the basics. When tranaction qualified for like kidn excghange treatment then gain…

Q: Jason inherited a piece of real estate from his father and later sells that real estate for…

A: Gain shall be the difference between sales price and the fair market value on the date of Jason’s…

Q: Tom Cruiser is buying a single-family residence in Oakvile, Ontario, for $805,000. According to the…

A: Taxable income: It is the income on which tax is calculated that is to be paid to the government and…

Q: Bernadette sold her home. She received cash of $40,000, the buyer assumed her mortgage of $180,000,…

A: This pertains to determination of gain and finding the character of that gain. Bernadette has sold…

Q: terry owns real estate with an adjusted basis of 600000 and a fair market value of 1100000. the…

A: Given information: Adjusted basis of real estate = 600,000 Fair market value = 1,100,000 Nonrecourse…

Q: Dan is the sole owner of his closely held business and he is considering retiring within the next…

A: The transfer of a business to the heir after the retirement of the original owner is referred to as…

Q: Jorge owns two passive investments, Activity A and Activity B. He plans to sell Activity A in the…

A: The suspended losses of activity B would be adjusted from the Sale of activity A in calculation of…

Q: Bob owned a duplex used as rental property.  The duplex had an adjusted basis to Bob of $86,000 and…

A: Given information:   Adjusted basis - $86,000 Fair Market Value - $300,000

Q: 1. On March 10, 2021, Juan sold land (adjusted basis = $150,000) to Richard for its FMV of $130,000.…

A: Since the land was purcahsed in 2009 and sold in 2021, therefore the loss will be long term…

Q: In year 0, Patrice purchased a machine to use in its business for $112,000. In year 3, Patrice sold…

A: Cost of machine= $112,000 Depreciation = $64,000 Book value of machine at Year 3 = $112,000 –…

Q: Kaylee transfers land to Mer Corporation with a basis of $300,000. The property is worth $700,000.…

A: Taxable income is the total income earned by an individual or a company on which he/she has to pay…

Q: Michael (single) purchased his home on July 1, 2011. He lived in the home as his principal residence…

A: A Taxpayer is required to include Capital Gain in his income. However A deduction of 250,000 is…

Q: Sergio operates a sole proprietorship. He has a home office that functions as his principal place of…

A: In order to qualify for a home office deduction, the taxpayer must use his/her home or a part of it…

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A: a.

Q: property with a fair market value of $120,000. What is the amount realized? a.) $1,370,000 b.)…

A:

Q: Lisa sells business property with an adjusted basis of $130,000 to her son, Alfred, for its fair…

A: Introduction:Recognized Gain/Loss: It is difference between the cost price of the asset less its…

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A: Profit on sale   totals on sale 1,400,000.00 less:cost of land (110,000.00) cost of…

Q: Oscar sells land (AB $100,000) to his son, Rob, for its FMV of $73,000. Which of the following…

A: Recognized Gain/Loss=Sale value-Cost of asset

Q: Brian purchased a block of land in June 1987 for $110,000. At the time that he acquired the land he…

A: Capital gain means the sale of assets like land, bond, stocks etc. on profit. The sale price of…

Q: John Travis owns a depreciable property with a FMV of $295,000. Its capital cost is $350,000 , the…

A: Depreciable property means the capital tangible fixed asset which is accounted in books of accounts…

Q: Tara owns a business and purchases buildings for the business on the following dates and amounts:…

A: For real estate property Mid - month convention ( one half of the month in which property is…

Q: H sold land to his sibling for $280,000. The land is used for farming and at the time of the sale…

A: The amount earned by an individual or company after deducting costs, allowances, and taxes is…

Q: Luciana, a nonshareholder, purchases a condominium from her employer for $85,000. The fair market…

A: Luciana purchased a condominium from her employer for $ 85,000 having fair market value of $…

Q: Margo receives a gift of real estate with an adjusted basis of $175,000 and a fair market value of…

A: Given data, Adjusted basis =$175,000 Fair market value =$100,000   Margo has generated zero…

Q: Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both…

A: Section 1231 is used for depreciable real property for more than one year. Under this section gain…

Q: Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the…

A: Capital gain refers to the amount that arises from the increase in the value of capital assets and…

Q: Bob owned a duplex used as rental property.  The duplex had an adjusted basis to Bob of $86,000 and…

A: Given information:   Adjusted basis for triplex ( in the hands of Carl) $279,000 Fair Market Value -…

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A: Capital gain on discounted method is 595,000 as per Australian government discount rate is 50%. The…

Q: Your supervisor has asked you to research the following situation concerning Owen and Lisa…

A: Rules applicable to non taxable exchange: 1. No gain or loss is recognized on exchange of like kind…

Q: Charles exchanged land used in his business plus 26,000 in cash for like-kind real estate. Charles…

A: Following is the recognized gain and new tax basis will be as follows

Q: Aiden dies first and is survived by Chloe, his sisters, and his wife. Aiden dies after Chloe, but…

A:

Q: Lily exchanges land used in her business for a different parcel of land to be used in her business.…

A: Ans. Whenever any asset is exchanged for another asset, the fair market value of the asset foregone…

Q: Mason buys real estate for $1,500,000 and lists ownership as follows: “Mason and Dana, joint tenants…

A: a. Where  the co-owners obtain the property from another property holder as a gift, then every owner…

Q: At the time of his death on July 9, Aiden held rights in the following real estate: The apartment…

A: The total dollar value of a person's assets at the time of death is referred to as the "gross…

Q: Cosmo and George are brothers. In 2021, Cosmo sells a parcei of Staten isiand land to George fer…

A: Purchase Price by Cosmo = 200,000 Selling Price to George = 180,000

Q: Sean sells land to Eli, his brother, for the fair market value of $39,000. Six months later when the…

A: Recognized gain or loss - It is a situation when an asset is sold at a price that is more than or…

Q: During the current year, Daniel James exchanges land used in his business for a new parcel of land.…

A: As, the land is being exchanged for land, so it will be considered as a like-kind exchange. Whenever…

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A:

Q: Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September…

A:

Q: T bought an antique desk and chair from her employer for $50 in Year 1 when the firm bought all new…

A: Option d is correct.  Profit can only be realised if the asset is sold. The amount and nature of…

Q: Mr. F sold his principal residence which he acquired for P1,000,000 for P3,000,000. At the time of…

A: Capital gain tax (CGT) refers to the profit which is made by individual from selling the capital…

Q: Voytek transfers land worth $200,000 with an adjusted basis of $17,000 to his wife Gosha for her…

A: Worth of land gifted = $200,000 Adjusted basis = $17,000 Transferred to his wife and purchased 3…

Q: What is Barbara's recognized gain or loss in the current year related to this exchange?

A: Given facts:  Fair value of old property = $330,000  Adjusted basis of old property = $275000  Fair…

Reasons for Estate Planning

Planning is a process that helps decide in advance about future activities and operations. Planning helps to draft the procedures by identifying, analyzing, and designing how to work, when to work, by whom should be done, and what has to be done. It is the primary step followed by a person, business organizations, institutions, companies, etc.