Chapter+5 - AF 450 Federal Taxation I Dr. Julia M. Camp...

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AF 450 – Federal Taxation I Dr. Julia M. Camp Solutions to Suggested Problems Chapter 5: I5-2, I5-5, I5-6, I5-13, I5-25, I5-33, I5-34, I5-35, I5-44, I5-48, I5-49, I5-61 I:0-1 Cost of the house $60,000 Cost of the room added to the house 10,000 Cost of built-in bookshelves 800 Basis for the house p. I:5-4. $70,800 I:0-2 a. David's holding period starts on October 22 of the current year (the day after the date of the gift) if David uses the FMV at the date of the gift to determine his basis. b. His holding period starts on January 20, 1995, if he uses his grandfather's basis. pp. I:5-28 and I:5-29. I:0-3 a. The value of the taxable estate would be $200,000 less and the estate tax is reduced by electing to use the alternate valuation date. b. Jim's basis for the property would be $200,000 higher, and he might have a smaller gain or larger loss when he sells or exchanges the land. c. The potential savings in estate tax is $74,000 (37% x $200,000). If the property is subsequently sold at a gain, the tax savings will be $30,000 (15% x
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This note was uploaded on 04/27/2008 for the course AF 450 taught by Professor Juliam.camp during the Spring '08 term at University of Massachusetts Boston.

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Chapter+5 - AF 450 Federal Taxation I Dr. Julia M. Camp...

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