Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 15, Problem 7DQ
To determine
Describe the reason for new land having a different holding period than the stock.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Valerie exchanges a building and land (used in her business) for Vanessa’s land and building and some equipment (used in her business). The assets have the following values: Provide the final answers to the questions below. Show your work.
Adjusted Basis
Fair Market Value
Valerie's real property
$9,760
$24,400
Vanessa's real property
$4,880
$19,520
Equipment
$4,392
$7,320
What are Valerie’s recognized gain or loss and basis for the land and building and equipment acquired from Vanessa?
What are Vanessa's recognized gain or loss and basis for the land and building acquired from Valerie?
Given Valerie’s gain/loss and the potential tax implications, do you recommend she makes this exchange?
Sarah exchanges a building and land (used in its business) for Tyler's land and building and some equipment (used in its business). The
assets have the following characteristics:
Adjusted Basis Fair Market Value
Sarah's real property
$3,600
$9,000
Tyler's real property
1,800
7,200
Equipment
1,620
2,700
a. What are Sarah's recognized gain or loss and basis for the land and building and equipment acquired from Tyler?
Her adjusted basis in the land and building she acquired from Tyler is $
Her recognized
is $
and her
adjusted basis in the equipment is $
b. What are Tyler's recognized gain or loss and basis for the land and building acquired from Sarah?
is $
Tyler's recognized
and his adjusted basis in the land and building he acquired from Sarah is
Sarah exchanges a building and land (used in her business) for Tyler's land and building and some equipment (used in his business). The assets have the following characteristics:
Adjusted Basis
Fair Market Value
Sarah’s real property
$120,000
$300,000
Tyler’s real property
60,000
220,000
Equipment
50,000
80,000
a. What are Sarah’s recognized gain or loss and basis for the land and building and equipment acquired from Tyler?
b. What are Tyler’s recognized gain or loss and basis for the land and building acquired from Sarah?
Chapter 15 Solutions
Individual Income Taxes
Ch. 15 - Prob. 1DQCh. 15 - Prob. 2DQCh. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - LO.2 Melissa owns a residential lot in Spring...Ch. 15 - LO.2 Ross would like to dispose of some land he...Ch. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - Prob. 9DQCh. 15 - Prob. 10DQ
Ch. 15 - Prob. 11DQCh. 15 - LO.3 Reba, a calendar year taxpayer, owns an...Ch. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - Prob. 15DQCh. 15 - Prob. 16CECh. 15 - Prob. 17CECh. 15 - Prob. 18CECh. 15 - Prob. 19CECh. 15 - LO.3 On June 5, 2019, Brown, Inc., a calendar year...Ch. 15 - LO.3 Camilos property, with an adjusted basis of...Ch. 15 - Prob. 22CECh. 15 - Prob. 23CECh. 15 - Prob. 24CECh. 15 - Prob. 25CECh. 15 - Prob. 26CECh. 15 - Prob. 27PCh. 15 - Prob. 28PCh. 15 - Prob. 29PCh. 15 - Prob. 30PCh. 15 - Prob. 31PCh. 15 - Prob. 32PCh. 15 - Prob. 33PCh. 15 - Ed owns investment land with an adjusted basis of...Ch. 15 - Prob. 35PCh. 15 - Prob. 36PCh. 15 - Prob. 37PCh. 15 - Prob. 38PCh. 15 - Prob. 39PCh. 15 - Prob. 40PCh. 15 - LO.3 Howards roadside vegetable stand (adjusted...Ch. 15 - Prob. 42PCh. 15 - Prob. 43PCh. 15 - Prob. 44PCh. 15 - Prob. 45PCh. 15 - Prob. 46PCh. 15 - What are the maximum postponed gain or loss and...Ch. 15 - Prob. 48PCh. 15 - Prob. 49PCh. 15 - Prob. 50PCh. 15 - Prob. 51PCh. 15 - Prob. 52PCh. 15 - Prob. 53PCh. 15 - Prob. 54PCh. 15 - Prob. 55PCh. 15 - Prob. 56PCh. 15 - Devon Bishop, age 45, is single. He lives at 1507...Ch. 15 - Prob. 1RPCh. 15 - Prob. 2RPCh. 15 - Taylor owns a 150-unit motel that was constructed...Ch. 15 - Prob. 6RPCh. 15 - Prob. 1CPACh. 15 - Susie purchased her primary residence on March 15,...Ch. 15 - Chad owned an office building that was destroyed...Ch. 15 - Prob. 4CPACh. 15 - Marsha exchanged land used in her business in...Ch. 15 - Prob. 6CPACh. 15 - Prob. 7CPA
Knowledge Booster
Similar questions
- Elaine exchanges a lot of land that is used exclusively for business purposes for another lot that also is to be used exclusively for business. The adjusted basis for the old lot is $19,750, and its FMV is $15,750. Required: Calculate Elaine’s recognized gain or loss on the exchange. (If no gain or loss is recognized, select "No gain/loss".) Calculate Elaine’s basis for the lot she receives.arrow_forwardMunabhaiarrow_forward1. Kelly exchanges land (adjusted basis of $75,000; fair market value of $62,000) used in her business and common stock held for investment (adjusted basis of $8,000; fair market value of $12,000) for a single parcel of land (fair market value of $74,000) to be used in her business in a like-kind exchange. Determine her basis for the land she exchanges.arrow_forward
- Problem 13-66 (LO. 4) Surendra's personal residence originally cost $340,000 (ignoring the value of the land). After living in the house for five years, he converts it to rental property. At the date of conversion, the fair market value of the house is $320,000. a. Surendra's basis for loss for the rental property is $ b. Surendra's basis for depreciation for the rental property is $ c. Surendra's basis for gain for the rental property is $ d. Could Surendra have obtained better tax results if he had sold his personal residence for $320,000 and then purchased another house for $320,000 to hold as rental property? e. Complete the letter below regarding an e-mail to your instructor. TO: Instructor FROM: Student DATE: January 6, 2021 The purpose of this e-mail is to address the tax issues associated with Surendra's conversion of his principal residence into a rental property. I am basing my conclusions on the information provided. The original cost (and adjusted basis at the time of the…arrow_forwardJoan transferred land with an adjusted basis of $55,000 and a fair market value of $59,000 to ABC Corporation in return for all of its stock. Joan also received a short-term note with a fair market value of $5,000 . Please calculate the following for Joan. You must show your all of your work. 1) Her realized gain 2) Her recognized gain 3) Her basis in the stock 4) Her basis in the note Please provide only typed answer solution no handwritten solution needed allowed... Please do it all neat and clean correctly... Thank youarrow_forwardSteve owns real estate (adjusted basis of $12,000 and fair market value of $15,000), which he uses in his business. Steve sells the real estate for $15,000 to Aubry (a dealer) and then purchases a new parcel of land for $15,000 from Joan (also a dealer). The new parcel of land would normally qualify as like-kind property.arrow_forward
- 1.arrow_forwardSix years ago, Donna purchased land as an investment. The land cost $150,000 and is now worth $480,000. Donna plans to transfer the land to Development Corporation, which will subdivide it and sell individual tracts. Development's income on the land sales will be ordinary in character. Read the requirements. Requirement a. What are the tax consequences of the asset transfer and land sales if Donna contributes the land to Development in exchange for all its stock? on the transfer of land to Development Corporation. Donna recognizes no gain or loss Development's basis in the land will be $ 150,000. All gain on the subsequent sales will be to Development. This alternative results in the pre-contribution gain post-contribution profit earned from subdividing the land ordinary income that accrued prior to Donna's transfer and the being taxed at a 21% tax rate. Requirement b. In what alternative ways can the transaction be structured to achieve more favorable tax results? Assume Donna's…arrow_forwardDuring the current year, Ethel exchanges a business land for different business land in a like-kind exchange. Ethel's adjusted basis in the land given up is $7,000, and she receives a land worth $13,000 plus $3,000 cash. a. Calculate the amount of gain realized by Ethel on the exchange. b. Calculate the amount of the gain that must be recognized by Ethel on the transaction.arrow_forward
- Explanationarrow_forwardLily exchanges land used in her business for a different parcel of land to be used in her business. Her adjusted basis for the land is $325,000 and the fair market value is $310,000. The fair market value of the new parcel of land is $300,000. In addition, Lily receives cash of $10,000. Calculate Lily’s realized and recognized gain or loss and her adjusted basis for the assets received.arrow_forwardMaria owns depreciable residential rental real estate that has accumulated depreciation of $65,000 (all from straight-line) . If Maria sold the property, she would have a $53,000 gain. The initial characterization of the gain would be: a.Section 1239 gain. b.Section 1250 gain. c.Section 1245 gain. d.Section 1231 gain.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT