Question

Patrick ho’s invest

Question 64 of 75. Patrick Ho's investment property was condemned. He purchased the property for $210,000. He received a net award of $250,000, and purchased a replacement property for $301,000. What is the amount of gain recognized after the replacement property is purchased? O $0 O $40,000 O $51.000 O $91,000 Mark for follow up Question 65 of 75. Kvra Bernard's basis in investment-use land was $9,000. She received a gross condemnation award of $13,000. Her net condemnation award was $12,600. She purchased replacement property at a cost of $13,000. What is Kyra's basis in the replacement property? $3,600 O $9.000 O $9,400 O $12,600

Answer 1

64. Answer : $0

Explanation: Recognized gain = Conversion proceeds - (the greater of Replacement property cost or the Adjusted basis of the Converted property)

Recognized gain = $0 (Conversion proceeds i.e $250,000 is less than the Replacement property cost of $301,000)

65. Answer : $9,400

Explanation: Total gain = $12,600 - $9,000 = $3,600

Recognized gain = $0 (Conversion proceeds i.e $12,600 is less than the Replacement property cost of $13,000)

Deferred gain = $3,600

Basis in the Replacement property = Replacement property cost - Deferred gain

= $13,000 - $3,600

= $9,400