Problem Set 4

Problem Set 4 - AAE 320 Farming Systems Management Problem...

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1 AAE 320 Farming Systems Management Problem Set #4 Due April 16, 2008 Guy and Barb Wire are married and file a joint income tax return each year. The following table shows the purchase price for items that were purchased, depreciation claimed, and fair market value of their farm assets. Asset Purchase Price Depreciation Claimed Fair Market Value Feed (Raised) 0 $90,000 50 Feeder calves (Raised) 0 25,000 30 Beef heifers (under 24 months old) (Raised) 0 12,000 60 beef cows (Raised) 0 40,000 Machinery $220,000 $100,000 155,000 Buildings 60,000 60,000 20,000 Land 175,000 0 500,000 Total $455,000 $160,000 $842,000 Guy and Barb are planning their transfer of the farm assets to their daughter, Liv. They have asked the following questions. Please answer them. An Excel spreadsheet is available on the course webpage as a template to help you answer these questions and I recommend using it. 1. If they sold all of the assets to Liv for their fair market value, how much gain do they have to report on their income tax return for each asset? 2.
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This note was uploaded on 08/08/2008 for the course AAE 320 taught by Professor Mitchell during the Spring '08 term at Wisconsin.

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Problem Set 4 - AAE 320 Farming Systems Management Problem...

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