Brody and Tanya recently sold some land they owned for $200,000 They received the land five years ago as a wedding gift from Brody's Aunt Jeaneette. Aunt Jeanette purchased the land many years ago when the property was worth $20,000 Aunt Jeanette had previously given the couple $25,000 as a gift at their wedding shower At the date of the gift the property was worth $100,000 and Aunt Jeanette paid $40,000 in gift tax What is the long term capital gain on the sale of the propery?
A. $42,400
B. $52,000
C. $92,000
D. $148,000
To solve:
Adjusted amount = Original purchase amount + (gift tax X difference in what the land was worth/original land worth amount)
Adjusted amount = $20,000 + ($40,000 X $80,000/$100,000)
Adjusted amount = $52,000
Land owned for $200,000
Adjust amount is $52,000
$200,000 - $52,000 = $148,000
The long-term capital gain on the property is $148,000.
Brody and Tanya recently sold some land they owned for $200,000 They received the land five...
Devon Bishop, age 45, is single. He lives at 1507 Rose Lane, Albuquerque, NM 87131. His Social Security number is 111-11-1112. Devon does not want $3 to go to the Presi-dential Election Campaign Fund. Devon’s wife, Ariane, passed away in 2014. Devon’s son, Tom, who is age 18, resides with Devon. Tom’s Social Security number is 123-45-6788. Devon owns a sole proprietorship for which he uses the accrual method of account-ing and maintains no inventory. His revenues and expenses for...
Note: This problem is for the 2018 tax year. Devon Bishop, age 45, is single. He lives at 1507 Rose Lane, Albuquerque, NM 87131. His Social Security number is 111-11-1112. Devon does not want $3 to go to the Presidential Election Campaign Fund. Devon's wife, Ariane, passed away in 2014. Devon's son, Tom, who is age 18, resides with Devon. Tom's Social Security number is 123-45-6788. Devon owns a sole proprietorship for which he uses the accrual method of accounting...