Realized loss: Adjusted Basis- consideration given | ||||||||||||
Realized gain: Amount realized on sale-Consideration given | ||||||||||||
Recognized Gain/loss=No Recognized gain/loss unless the assets is sold. | ||||||||||||
a) | Heather's realized loss($75000-$50000)=$25000 and No recognized gain or loss. | |||||||||||
Realized gain: Amount realized on sale-Consideration given | ||||||||||||
Recognized Gain=Amount Realized on sale to third party-Adjusted Basis | ||||||||||||
b) | The Partnership later sells the land to a third party for $80000. The partnership has a realized gain of ($80000-$50000) | |||||||||||
and recognized gain of ($80000-$75000)=$5000 on its sale of land. | ||||||||||||
Exercise 21-24 (LO. 13) Heather sells land adjusted basis, $75,000; fair market value $95,000 partnership pays...
Tanya Fletcher owns undeveloped land (adjusted basis of $80,000 and fair market value of $92,000) on the East Coast. On January 4, 2017, she exchanges it with Lisa Martin (an unrelated party) for undeveloped land on the West Coast and $3,000 cash. Lisa has an adjusted basis of $72,000 for her land, and its fair market value is $89,000. As the real estate market on the East Coast is thriving, on September 1, 2018, Lisa sells the land she acquired...