Homework Answers
A. $184,000, Ordinary income.
Fair Market value of the building = $502,500
Original basis = $375,000
Depreciation = $56,500
Adjusted Basis = $318,500 [ $375,000 - $56,500]
Ordinary Gain / (Loss) recognized = $184,000 [502,500 - 318500]
Luke must recognize ordinary income on the sale of the building because he sold it at a gain to a related person (his wholly owned corporation) and the asset is a depreciable asset in the hands of the related person.
Add Answer to:
Required information [The following information applies to the questions displayed below.) Luke sold a building and...
Required information [The following information applies to the questions displayed below.] Luke sold a building and...
Required information [The following information applies to the questions displayed below.] Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $502,500; Luke built the building several years ago at a cost of $375,000. Luke had claimed $56,500 of depreciation expense on the building. The fair market value of the land was determined to be $254,000...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $472,500; Luke built the building several years ago at a cost of $437,500. Luke had claimed $91,500 of depreciation expense on the building. The fair market value of the land was...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $472,500; Luke built the building several years ago at a cost of $437,500. Luke had claimed $91,500 of depreciation expense on the building. The fair market value of the land was...
Required information The following information applies to the questions displayed below.) Ivan incorporated his sole proprietorship...
Required information The following information applies to the questions displayed below.) Ivan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: Inventory Building Land Total FMV $ 19,600 83,500 78,250 $181,350 Adjusted Basis $ 37,250 54,750 40,250 $132,250 The fair market value of the corporation's stock received in the exchange equaled...
Required information [The following information applies to the questions displayed below.] David’s basis in the Jimsoo...
Required information
[The following information applies to the questions
displayed below.]
David’s basis in the Jimsoo Partnership is $65,000. In a
proportionate liquidating distribution, David receives cash of
$9,400 and two capital assets: (1) Land A with a fair market value
of $24,800 and a basis to Jimsoo of $19,600, and (2) Land B with a
fair market value of $11,800 and a basis to Jimsoo of $19,600.
Jimsoo has no liabilities.
c1. If the two parcels of land had...
! Required information [The following information applies to the questions displayed below.) Ron and Hermione formed...
! Required information [The following information applies to the questions displayed below.) Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total THV $112,000 168,000 $280,000 Tax- Adjusted Basis $ 28,000 112,000 $140,000 To equalize the exchange. Wizard Corporation paid...
Required information [The following information applies to the questions displayed below.] Kase, an individual, purchased some...
Required information [The following information applies to the questions displayed below.] Kase, an individual, purchased some property in Potomac, Maryland, for $152,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase’s Maryland property. Kase agrees to the exchange. What is Kase’s realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the...
Required information [The following information applies to the questions displayed below.] Kase, an individual, purchased some...
Required information [The following information applies to the questions displayed below.] Kase, an individual, purchased some property in Potomac, Maryland, for $152,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase’s Maryland property. Kase agrees to the exchange. What is Kase’s realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the...
Required information [The following information applies to the questions displayed below. Zhang incorporated her sole proprietorship...
Required information [The following information applies to the questions displayed below. Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adiusted bases: Adjusted FMV Basis Building Land Total Inventory 64,000 32,000 480,000 736,000 320,000 960,000 $1,280,000 $1,312,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The...
Required information (The following information applies to the questions displayed below) Metro Corp. traded Land A...
Required information (The following information applies to the questions displayed below) Metro Corp. traded Land A for Land B. Metro originally purchased Land A for $50,000 and Land A's adjusted basis was $25,000 at the time of the exchange. What is Metro's realized gain or loss, recognized gain or loss, and adjusted basis in Land B in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Input all other amounts as positive values. Leave...
Required information [The following information applies to the questions displayed below.] Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $502,500; Luke built the building several years ago at a cost of $375,000. Luke had claimed $56,500 of depreciation expense on the building. The fair market value of the land was determined to be $254,000...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $472,500; Luke built the building several years ago at a cost of $437,500. Luke had claimed $91,500 of depreciation expense on the building. The fair market value of the land was...
Required information Problem 11-46 (LO 11-4) [The following information applies to the questions displayed below.) Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $472,500; Luke built the building several years ago at a cost of $437,500. Luke had claimed $91,500 of depreciation expense on the building. The fair market value of the land was...
Required information The following information applies to the questions displayed below.) Ivan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: Inventory Building Land Total FMV $ 19,600 83,500 78,250 $181,350 Adjusted Basis $ 37,250 54,750 40,250 $132,250 The fair market value of the corporation's stock received in the exchange equaled...
Required information
[The following information applies to the questions
displayed below.]
David’s basis in the Jimsoo Partnership is $65,000. In a
proportionate liquidating distribution, David receives cash of
$9,400 and two capital assets: (1) Land A with a fair market value
of $24,800 and a basis to Jimsoo of $19,600, and (2) Land B with a
fair market value of $11,800 and a basis to Jimsoo of $19,600.
Jimsoo has no liabilities.
c1. If the two parcels of land had...
! Required information [The following information applies to the questions displayed below.) Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total THV $112,000 168,000 $280,000 Tax- Adjusted Basis $ 28,000 112,000 $140,000 To equalize the exchange. Wizard Corporation paid...
Required information [The following information applies to the questions displayed below. Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adiusted bases: Adjusted FMV Basis Building Land Total Inventory 64,000 32,000 480,000 736,000 320,000 960,000 $1,280,000 $1,312,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The...
Required information (The following information applies to the questions displayed below) Metro Corp. traded Land A for Land B. Metro originally purchased Land A for $50,000 and Land A's adjusted basis was $25,000 at the time of the exchange. What is Metro's realized gain or loss, recognized gain or loss, and adjusted basis in Land B in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Input all other amounts as positive values. Leave...
Most questions answered within 3 hours.
-
Wildhorse Company follows the practice of pricing its inventory
at the lower-of-cost-or-market, on an individual-item
basis....
asked 24 minutes ago -
3. (10 pts) You grow a corn crop that yields 150 bushels ac-1,
with the following...
asked 13 minutes ago -
7. The term Six Sigma refers to:
Select one:
a. The control limits established in a...
asked 23 minutes ago -
For the following reaction: A(g) + 2 B(g) ⇌ 2 C(g) Calculate the
equilibrium constant K...
asked 25 minutes ago -
Which of the following best describes tidal volume? options:
1.The amount of oxygen in the air...
asked 41 minutes ago -
1. Smaller cost distortions occur when the traditional systems'
single indirect-cost rate and the activity-cost-driver rates:...
asked 49 minutes ago -
Using either a FMECA approach or some other appropriate RCA
tool, identify five risk treatment actions...
asked 50 minutes ago -
If for a test the P-value is between 0.0025 and 0.005, what
conclusion can you draw?...
asked 1 hour ago -
Using Python. Write a function clean2(aList) that takes a list
of integers aList as argument, and...
asked 1 hour ago -
Intrapreneurship is defined as the
development of an enterprise culture with an existing (Nandan,
2009). An...
asked 1 hour ago -
QUESTION 1 Tamiflu is a drug used to treat influenza. A study
found that Tamiflu reduced...
asked 1 hour ago -
Which of the following would be less likely to be used to
allocate factory overhead when...
asked 1 hour ago