Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Question
Chapter 12, Problem 24P
a.
To determine
Explain whether Person M has given or received the boot.
b.
To determine
Calculate the recognized gain or loss on the exchange.
c.
To determine
Calculate the recognized gain or loss on the exchange.
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Students have asked these similar questions
Reese and Jake engage in a like-kind exchange. Reese transfers real estate with a fair market value of
$500,000 and an adjusted basis of $200,000 to Jake. Jake transfers real estate worth $700,000 and an
adjusted basis of $250,000, plus a $200,000 mortgage on the property, to Reese. What is Jake's potential
or deferred gain before and after the transaction?
$450,000 potential gain before the transaction; $50,000 potential gain after the transaction.
$250,000 potential gain before the transaction; $50,000 potential gain after the transaction.
$450,000 potential gain before the transaction; $250,000 potential gain after the transaction.
$250,000 potential gain before the transaction; $200,000 potential gain after the transaction.
Income Tax
Your client has a real estate asset used in his business. He exchanges it for a like-kind real estate
asset owned by Ava. The basis of your client's asset is $50,000 and he gives Ava $25,000 cash
plus the asset in exchange for Ava's asset, which is worth $40,000. Ava's basis in her original asset
is $9,000. What is Ava's gain or loss? A. $25,000 gain recognized. $31,000 gain realized and
recognized. C. $0 gain recognized. D. $0 loss recognized.
Bernadette sold her home. She received cash of $40,000, the buyer assumed her mortgage of $180,000, and she paid closing costs of $2,300 and a broker’s commission of $7,000.
What is the amount realized on the sale?
If she has a basis in the home of $138,000, what is her realized gain or loss on the sale?
What is the character of the recognized gain or loss?
How would your answer to (c) change if Bernadette sold a building used by her sole proprietorship rather than her personal residence?
Chapter 12 Solutions
Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
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Similar questions
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