Clem and Chloe, a married couple, sell their principal residence that they have owned and occupied for the past twenty years.  the adjusted basis for the residence is $324,000.  They incurred selling expense of $30,000.  How much gain must they recognize if they sell the residence for $904,000? a.  $50,000 b.  $290,000 c.   $40,000 d.  $300,000

Hello, Can you help me with the below question? Three years ago, Louise bought a rental house for $450,000. Last year, she built a small addition for $50,000. In 2021, she decides to sell the house. She has taken depreciation of $21,000. What is Louise's adjusted basis? a.$450,000 b.$429,000 c.$500,000 d.$479,000

Nell, Nina, and Nora Potter, who are sisters, sell their principal residence (owned as tenants in common) in which they have lived for the past 25 years. The youngest of the sisters is age 60. The selling price is $960,000, selling expenses and legal fees are $63,000, and the adjusted basis is $120,000 (the fair market value of the residence when inherited from their parents 25 years ago; they made no capital improvements during the time they held the residence). The sisters plan to move into rental housing and not acquire another residence. Nell has contacted you on behalf of the Potters regarding the tax consequences of the sale.a. Write a letter to Nell advising her of the tax consequences and how taxes can be minimized. Nell’s address is 100 Oak Avenue, Billings, MT 59101.b. Prepare a memo discussing your approach to the situation for the tax files.

4 0 Frankie purchased a freehold townhouse which she used to generate rental income. She originally acquired the unit at cost of $350,000. Over the years, she had claimed $27,000 in CCA, such that her UCC at the beginning of the year was $323,000. This year, she sold the unit for $325,000. She incurred selling expenses of $5,000. Frankie purchased another rental property before the end of the year for $225,000. What statement is true? Oa) Frankie has neither a recapture, nor a terminal loss. Ob) Frankie has a terminal loss of $3,000. Oc) Frankie has a recapture of $25,000. O d) Frankie has a terminal loss of $5,000.

Linda purchased two cars in 2018.  A vintage Thunderbird for $72,000 and a Honda Accord for $29,000.  Both cars were used solely for personal purposes.  During the current year, she sold the Thunderbird for $85,000 and the Honda for $25,000.  How much gain or loss will she report for these two transactions? A. $9,000 gain B. $4,000 loss C. No gain or loss D. $13,000 gain

Melody (single) had her home by the state condemned department of transportation. Her basis in the house was $200,000. She received a net condemnation award of $500,000. Rather than replace the property, Melody decided to rent an apartment. Melody had owned the home and used it as her main home for the ten years prior to the condemnation. How much gain does Melody report from the sale? a. $0 b.$50,000 c.$250,000 d.$300,000

Abby's home had a basis of $360,000 ($160,000 attributable to the land) and a fair market value of $340,000 ($155,000 attributable to the land) when she converted 70% of it to business use by opening a bed-and-breakfast. Four years after the conversion, Abby sells the home for $500,000 ($165,000 attributable to the land). a.  Calculate Abby's basis for gain, loss, and cost recovery for the portion of her personal residence that was converted to business use.  b. Calculate the cost recovery deducted by Abby during the four-year period of business use, assuming that bed-and-breakfast is opened on January 1 of Year 1 and the house is sold on December 31 of year 4. Assume that the cost recovery percentages are 2.461% in Year 1 and 2.564% in Years 2–5. Round your computations and the final answer to the nearest dollar. The total cost recovery for the four-year period is $_________ c. What is Abby's recognized gain or loss on the sale of the business use portion? Abby's recognized…

Luis sold a rental house he had owned for several years. He claimed $24,787 in depreciation over the years. He claimed the allowable depreciation each year except the first year he owned the house, when he could have claimed $1,342 but failed to do so. Luis must adjust his basis in the house by the amount of depreciation allowed or allowable. What is this amount? $1,342 $23,445 $24,787 $26,129

32 Xavier bought his chicken farm property for $60,000. When he retired, he sold the property to his granddaughter, Julia, for $115,000. At the time of the transfer, the farm was valued at $600,000. Xavier had already used his lifetime capital gains exemption on the disposition of a previous farm property. What was Julia's adjusted cost base (ACB)? O a) $60,000 O b) $115,000 O c) $55,000 O d) $600,000 Previous Question Next Question View Summary CFP®, CERTIFIED FINANCIAL PLANNER® and are certification marks owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). FP Canada" is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.

Brenda Baines sells land to Carla Chandler for $15,000 cash and a piece of equipment with an adjusted basis of 43. $15,000 and a fair market value of $20,000. The land was subject to a $25,000 mortgage which Carla assumed. Brenda incurred $2,500 in selling expenses. What is the amount realized by Brenda? a. $55,000 b. $60,000 c. $52,500 d. $57,500