Basket Purchase. (Obj. 1) Leo purchased an apartment building. Leo paid $300,000 in cas assumed a $200,000 mortgage, and paid the following: Brokerage commission $35,000 Attorney's fee to acquire title 2,000 What is Leo's basis for depreciation on this building if the FMV of the land and building a $100,000 and $400,000, respectively?

Basket Purchase. (Obj. 1) Leo purchased an apartment building. Leo paid $300,000 in cas assumed a $200,000 mortgage, and paid the following: Brokerage commission $35,000 Attorney's fee to acquire title 2,000 What is Leo's basis for depreciation on this building if the FMV of the land and building a $100,000 and $400,000, respectively?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 4DQ

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2 A transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of $100 and is subject to a mortgage of $40. a. What are the consequences to each of the parties? b. Suppose in that the mortgage was placed on the property immediately before the transfer to Newco. A wanted cash in order to buy a yacht to be used for personal purposes, so he took out a mortgage on the land. Would this change your answer? c Suppose instead that the mortgage was for $60. Suppose further that this mortgage was incurred on the purchase of the property many years ago. Would this change your answer? d. Same as (c) except that A also transfers accounts payable of $10. A is a cash basis taxpayer. How would this change your answer?
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