Question

what is the Amount realized for the sale of the entire property?

what is the adjusted basis for the entire property?

use an excel file to find the amount realized and the adjusted basis

and calulatr the entire gain on sale of this property into

section 1231 gain

section 1245 gain

section 1250 gain

show excel formulas

A friend of yours wants to become a client and start a new company Cyberdyne Systems, specializing in Al research. In order to get seed money, she wants to sell a rental property she has owned for about 15 years. Below is the information derived from her tax returns, which she inherited from her uncle, who owned the home for many years before dying (50 Pts). • Cost of the House (in 1995) $200,000 • Value at time placed into service as rental property (2003): $250,000 • Depreciation taken on the house: $150,000 • Sales price of the house: $525,000 • Expenses of selling the home: $25,000 • Additional Assets for the home and their required information (All assets were put into service after the rental property was established and all items will go to the new owner): Asset Purchase Price Accumulated MACRS Life Dep Refrigerator $2500 $2000 5 Years Water Heater $700 $200 27.5 Years Stove $1200 $1200 5 years New Bathroom $35,000 $12,000 27.5 Years Improvement Using the above questions, answer the questions below: What is the AR for the sale of the entire property? What is the AB for the entire property? Provide an allocation Excel for the AR and AB for each property and calculate the entire gain on the sale of this property into the following categories: • $1231 Gain • 81245 Gain • $1250 Gain

Answer 1

Selling price of the House		$       525,000
Cost of the house at the time of Rental	$        250,000
Less: Depreciation taken on House	$        150,000	$     (100,000)
Less: Expenses of Selling		$       (25,000)
Less: Written Down Value of Additional Assets
Refrigerator ($2500-$2000)	$                500
Water Heater ($700-$200)	$                500
Stove ($1200-$1200)	$                   -
New Bathroom ($35000-$12000)	$          23,000	$       (24,000)
Actual Gain on sale of House		$       376,000