Homework Answers
Realised and recognised gain = $231712
Ordinary gain = $8912
Capital Gain = $222800
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Exercise 16-12 (Algorithmic) (LO. 2) Dexter owns a large tract of land and subdivides it for...
Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets...
Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $140,200 each. Dexter's basis in each lot sold is $98,140, and he incurs total selling expenses of $5,608 on each sale. If required, round your answers to the nearest dollar. Dexter has a realized and recognized gain of $_______?, of which $_______?...
Problem 16-25 (LO. 2) Maria meets all of the requirements of § 1237 (subdivided realty). In...
Problem 16-25 (LO. 2) Maria meets all of the requirements of § 1237 (subdivided realty). In 2019, she begins selling lots and sells four separate lots to four different purchasers. She also sells two contiguous lots to another purchaser. The sales price of each lot is $30,000. Maria's basis for each lot is $15,000. Selling expenses are $500 per lot. a. What are the realized and recognized gain? The realized gain is $ and recognized gain is $ b. What...
Problem 7-12 (Algorithmic) (LO. 1, 2, 3) Kevin purchases 1,000 shares of Bluebird Corporation stock on...
Problem 7-12 (Algorithmic) (LO. 1, 2, 3) Kevin purchases 1,000 shares of Bluebird Corporation stock on October 3, 2018, for $340,000. On December 12, 2018, Kevin purchases an additional 750 shares of Bluebird stock for $238,000. According to market quotations, Bluebird stock is selling for $340 per share on 12/31/18. Kevin sells 500 shares of Bluebird stock on March 1, 2019, for $190,400. a. The adjusted basis of Kevin's Bluebird stock on December 31, 2018, is $ 595,000 . Feedback...
Problem 15-42 (Algorithmic) (LO. 3) Albert owns 100 acres of land on which he grows spruce...
Problem 15-42 (Algorithmic) (LO. 3) Albert owns 100 acres of land on which he grows spruce trees. His adjusted basis for the land is $211,200. He receives condemnation proceeds of $21,120 when the city's new beltway takes 5 acres along the eastern boundary of his property. He also receives a severance award of $12,672 associated with the possible harmful effects of exhaust fumes on his trees. Albert invests the $33,792 in a growth mutual fund. a. Determine the tax consequences...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 800 shares of stock in...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 800 shares of stock in Hobbes Corporation, a new startup company, for $114,400. Calvin acquired the stock directly from Hobbes, and it is classified as $ 1244 stock (at the time Calvin acquired his stock, the corporation had $900,000 of paid- in capital). On January 15, 2019, Calvin sold all of his Hobbes stock for $11,440. Assuming that Calvin is single, determine his tax consequences as a result of...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 350 shares of stock in...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 350 shares of stock in Hobbes Corporation, a new startup company, for $121,800. Calvin acquired the stock directly from Hobbes, and it is classified as § 1244 stock (at the time Calvin acquired his stock, the corporation had $900,000 of paid-in capital). On January 15, 2019, Calvin sold all of his Hobbes stock for $12,180. Assuming that Calvin is single, determine his tax consequences as a result of this...
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market...
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market value of $43,500 and inventory with a basis of $15,400 and fair market value of $23,100 in exchange for 100% of Zion Corporation stock. The land is subject to a $7,250 mortgage Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received If an amount is zero, enter "O". The exchange istax-free under $ 351 because the release of a...
Exercise 14-16 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are...
Exercise 14-16 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are $18,530. She sells the property to Kate on April 2, 2019, for $926,500. Kate pays the real property taxes for the entire year on October 1, 2019. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar. a. How much of the property taxes can be deducted by Sally and how much by Kate? Sally...
Problem 12-16 (LO. 2, 4) Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following...
Problem 12-16 (LO. 2, 4) Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Seth- Inventory $30,000 $96,000 30* From Pete- Equipment ($30,000 of depreciation taken by Pete in prior years) 45,000 99,000 From Cara- Proprietary process 15,000 90,000 From Jen- Cash 30,000 30,000 *Seth receives $6,000 in cash in addition to the 30 shares. **Pete receives $9,000 in cash in addition to the...
Problem 16-25 (LO. 2) Maria meets all of the requirements of § 1237 (subdivided realty). In 2019, she begins selling lots and sells four separate lots to four different purchasers. She also sells two contiguous lots to another purchaser. The sales price of each lot is $30,000. Maria's basis for each lot is $15,000. Selling expenses are $500 per lot. a. What are the realized and recognized gain? The realized gain is $ and recognized gain is $ b. What...
Problem 15-42 (Algorithmic) (LO. 3) Albert owns 100 acres of land on which he grows spruce trees. His adjusted basis for the land is $211,200. He receives condemnation proceeds of $21,120 when the city's new beltway takes 5 acres along the eastern boundary of his property. He also receives a severance award of $12,672 associated with the possible harmful effects of exhaust fumes on his trees. Albert invests the $33,792 in a growth mutual fund. a. Determine the tax consequences...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 800 shares of stock in Hobbes Corporation, a new startup company, for $114,400. Calvin acquired the stock directly from Hobbes, and it is classified as $ 1244 stock (at the time Calvin acquired his stock, the corporation had $900,000 of paid- in capital). On January 15, 2019, Calvin sold all of his Hobbes stock for $11,440. Assuming that Calvin is single, determine his tax consequences as a result of...
Exercise 6-3 (Algorithmic) (LO. 2) On May 9, 2017, Calvin acquired 350 shares of stock in Hobbes Corporation, a new startup company, for $121,800. Calvin acquired the stock directly from Hobbes, and it is classified as § 1244 stock (at the time Calvin acquired his stock, the corporation had $900,000 of paid-in capital). On January 15, 2019, Calvin sold all of his Hobbes stock for $12,180. Assuming that Calvin is single, determine his tax consequences as a result of this...
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market value of $43,500 and inventory with a basis of $15,400 and fair market value of $23,100 in exchange for 100% of Zion Corporation stock. The land is subject to a $7,250 mortgage Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received If an amount is zero, enter "O". The exchange istax-free under $ 351 because the release of a...
Exercise 14-16 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are $18,530. She sells the property to Kate on April 2, 2019, for $926,500. Kate pays the real property taxes for the entire year on October 1, 2019. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar. a. How much of the property taxes can be deducted by Sally and how much by Kate? Sally...
Problem 12-16 (LO. 2, 4) Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Seth- Inventory $30,000 $96,000 30* From Pete- Equipment ($30,000 of depreciation taken by Pete in prior years) 45,000 99,000 From Cara- Proprietary process 15,000 90,000 From Jen- Cash 30,000 30,000 *Seth receives $6,000 in cash in addition to the 30 shares. **Pete receives $9,000 in cash in addition to the...
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