Required information Problem 09-45 (LO 09-2) (Algo) [The following information applies to the questions displayed below.] Ansel purchased raw land three years ago for $140,000 to hold as an investment. After watching the value of the land drop to $105,000, he decided to contribute it to Mountainside Developers LLC in exchange for a 5 percent capital and profits interest. Mountainside plans to develop the property and will treat it as inventory, like all the other real estate it holds. Problem 09-45 Part a (Algo) a. If Mountainside sells the property for $105,000 after holding it for one year, how much gain or loss does it recognize, and what is the character of the gain or loss? [Hint. See §724.] Capital loss

Required information Problem 09-45 (LO 09-2) (Algo) [The following information applies to the questions displayed below.] Ansel purchased raw land three years ago for $140,000 to hold as an investment. After watching the value of the land drop to $105,000, he decided to contribute it to Mountainside Developers LLC in exchange for a 5 percent capital and profits interest. Mountainside plans to develop the property and will treat it as inventory, like all the other real estate it holds. Problem 09-45 Part a (Algo) a. If Mountainside sells the property for $105,000 after holding it for one year, how much gain or loss does it recognize, and what is the character of the gain or loss? [Hint. See §724.] Capital loss

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 5DQ

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Claude purchased raw land three years ago for $1,000,000 to develop into lots and sell to individuals planning to build their dream homes. Claude intended to treat this property as inventory, like his other development properties. Before completing the development of the property, however, he decided to contribute it to South Peak Investors LLC when it was worth $3,000,000, in exchange for a 10 percent capital and profits interest. South Peak’s strategy is to hold land for investment purposes only and then sell it later at a gain. a. If South Peak sells the property for $3,110,000 four years after Claude’s contribution, how much gain or loss is recognized, and what is its character? [Hint: See §724.] [capital gain/loss or Ordinary gain/loss] b. If South Peak sells the property for $3,110,000 five and one-half years after Claude’s contribution, how much gain or loss is recognized, and what is its character?
S Required information [The following information applies to the questions displayed below.] Carl purchased an apartment complex for $3.5 million on March 17 of year 1. of the purchase price, $1,500,000 was attributable to the land the complex sits on. He also installed new furniture into half of the units at a cost of $84,000. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Enter your answers in dollars and not in millions of dollars. a. What is Carl's allowable depreciation deduction for his real property for years 1 and 2? Note: Round your final answers to the nearest whole dollar amount. Year 1 Year 2 Depreciation Deduction
The deed we saw from 1910 (property near Belle Meade, Davidson Co., TN) lists the selling price for 303 acres of land at $12,000. In 2009, the property was appraised for $20,000,000. A non-profit group purchased it for $10,800.000. a. First, calculate the simple RO1 (%) based on the 1910 price and the 2009 price of $10,800,000. b. What other information would be useful in estimating the true profit made?
Required information Problem 11-56 (LO 11-6) (Algo) [The following information applies to the questions displayed below.] Kase, an individual, purchased some property in Potomac, Maryland, for $152,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase's Maryland property. Kase agrees to the exchange. What is Kase's realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the following alternative scenarios? Note: Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable. Problem 11-56 Part-b (Algo) b. The transaction qualifies as a like-kind exchange, and the fair market value of each property is $116,000. Description Adjusted basis in new property Amount
Problem 11-56 (LO 11-6) (Algo) [The following information applies to the questions displayed below.] Kase, an individual, purchased some property in Potomac, Maryland, for $225,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase's Maryland property. Kase agrees to the exchange. What is Kase's realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable.) Problem 11-56 Part-a (Algo) a. The transaction qualifies as a like-kind exchange, and the fair market value of each property is $800,000. Description Amount Realized gain Recognized gain Adjusted basis in new property $ $ $ 575,000 0 225,000
Required information [The following information applies to the questions displayed below.] Carl purchased an apartment complex for $3.5 million on March 17 of year 1. of the purchase price, $1,500,000 was attributable to the land the complex sits on. He also installed new furniture into half of the units at a cost of $84,000. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Note: Enter your answers in dollars and not in millions of dollars. b. What is Carl's allowable depreciation deduction for year 3 if the real property is sold on January 2 of year 3? Note: Do not round intermediate computations. Round your final answer to the nearest whole dollar amount. Depreciation for year 3
Required information [The following information applies to the questions displayed below.] Carl purchased an apartment complex for $3.3 million on March 17 of year 1. of the purchase price, $1,400,000 was attributable to the land the complex sits on. He also installed new furniture into half of the units at a cost of $82,000. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Enter your answers in dollars and not in millions of dollars.) a. What is Carl's allowable depreciation deduction for his real property for years 1 and 2? (Round your final answers to the nearest whole dollar amount.) Depreciation Deduction Year 1
! Required information [The following information applies to the questions displayed below.] Russell Corporation sold a parcel of land valued at $400,000. Its basis in the land was $275,000. For the land, Russell received $50,000 in cash in year 0 and a note providing that Russell will receive $175,000 in year 1 and $175,000 in year 2 from the buyer. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) b. What is Russell's recognized gain in year O, year 1, and year 2? Year Recognized Gain 0 1 2
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Ansel purchased raw land three years ago for $200,000 to hold as an investment. After watching the value of the land drop to $150,000, he decided to contribute it to Mountainside Developers LLC in exchange for a 5 percent capital and profits interest. Mountainside plans to develop the property and will trat it as inventory, like all the other real estate it holds. If Mountainside sells the property for $150,000 after holding it for one year, how much gain or loss does it recognize, and what is the character of the gain or loss? If Mountainside sells the property for $125,000 after holding it for two years, how much gain or loss does it recognize, and what is the character of the gain or loss? If Mountainside sells the property for $150,000 after holding it for six years, how much gain or loss does it recognize, and what is the character of the gain or loss?
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Lonnie Carson purchased Royal Oaks Apartments two years ago. An opportunity has arisen for Carson to purchase a larger apartment project called Royal Palms, but Carson believes that he would have to sell Royal Oaks to have sufficient equity capital to purchase Royal Palms. Carsonpaid $2 million for Royal Oaks two years ago, with the land representing approximately $200,000 of that value. A recent appraisal indicated that the property is worth about $2.2 million today. When purchased two years ago, Carson financed the property with a 70 percent mortgage at 10 percent interest for 25 years (monthly payments). The property is being depreciated over 27.5 years (1/27.5 per year for simplicity). Effective gross income during the next year is expected to be $350,000, and operating expenses are projected to be 40 percent of effective gross income. Carson expects effective gross income to increase by 3 percent per year. The propertyvalue is expected to increase at the same 3 percent annual…