Question

99. Ifa parcel of land that is easily worth $160,000 is offered for sale at $120,000. It is aessed for tax purposes at $100,000, and was originally purchased for $95,000. In compating the gain on the sale of the land to an unrelated party for $137,000, the seller had a tax basis in the land of A. $137,000. B. $95,000 C. $160,000 D. $160,000. E. $100.000. 100. A new HVAC system was purchased by Liv for $90,200. Liv hired a qualified installer to pat the HVAC system into the building at cost of $4,000. Since the HVAC was energy efficient, Liv got an instant rebate from the manufacturer of $2,000. In addition, Liv paid $5,400 sales tax and a $250 delivery charge. What is Liv's tax basis in the HVAC system? 101. Assume the following items were recorded on a closing settlement statement as a result of the acquisition of a real estate property. Identify the treatment of each item a "B Amount is required to be capitalized and inciuded in tax basis of the real estate D Amount is currently deductible expense or currently includable in income "A" Amount is required to be capitalized and amortized over the life of the loan Prepaid property taxes paid at the closing table . Broker fees paid upon the acquisition of the property. Loan documentation fees required by a lender. . Title insurance for the acquirer. . Rent for occupancy of the property that was prepaid to the seller prior to closing 102. A real estate profesional acquires a hotel property. She/he hires an accountant to prepare a cont segregation study to determine the tax classification of the assets in the hotel. Describe what the cost segregation study will do and the benefits that the real estate profesional will achieve:

Answer 1

99. $137000

100. $90200 +$4000 -$2000 +$5400 +$250 = $97850

101. A

B

D

A

B