Research Problem 3. Randall owns an office building (adjusted basis of $250,000) that he has been renting to a group of physicians. During negotiations over a new seven-year lease, the physicians offer to purchase the building for $900,000. Randall accepts the offer with the stipulation that the sale be structured as a delayed § 1031 transaction. Consequently, the sales proceeds are paid to a qualified third-party intermediary on the closing date of September 30, 2023. On October 2, 2023, Randall properly identifies an office building that he would like to acquire. Unfortunately, on November 10, 2023, the property Randall selected is withdrawn from the market. Working with the intermediary, on November 12, 2023, Randall identifies another office building that meets his requirements. The purchase of this property closes on December 15, 2023, and the title is transferred to Randall. Randall treats the transaction as a like-kind exchange. Even though the original office building identified was not acquired, Randall concludes that in substance, he has satisfied the 45-day rule. He identified the acquired office building as soon as the negotiations ceased on his first choice. Should the IRS accept Randall's attempt to comply? Explain.

Show the solution in good accounting form Diamond's Pizza Inc. enters into a franchise agreement on December 31, 2019, giving Domino Corp. the right to operate as a franchisee of Diamond's Pizza for 5 years. Diamond charges Domino an initial franchisee fee of P475,000 for the right to operate as a franchisee. Of this amount, P190,000 is payable when Domino Corp. signs the agreement, and the balance is payable in five annual payments of P57,000 each on December 31. Consider the following for allocation of the transaction price at December 2019. Rights to the trade name, market area, technical and propriety know-how P190,000.00 Services - training, etc 94,591.50 Machinery and equipment etc. (costing, P95, 000) 133,000.00 Total Transaction price P417,591.50 The credit rating of Domino indicates that money can be borrowed at 8%. The present value of an ordinary annuity of five annual receipts of P57,000 each discounted at 8% is P227, 591.50. The discount of P57,408.50 represents…

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1. Debbie acquired a franchise to operate a donut shop from Dollar Donuts, Inc., for $100,000. She incurred anadditional $4,000 in legal costs to negotiate the terms with the franchiser. In five years, the franchise contract will berenegotiated. The current contract also states that there will be a $3, 000 annual fee plus a two percent charge basedon the store's annual revenue, which is expected to average 90,000 per year. What is the franchise cost that should becapitalized? a. $88,000 b. $92, 000 c. $100,000 d. $104,000