# BUSA427_Chapter11.docx - Chapter 11 Ch. 11: Question 21 a....

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Chapter 11Ch. 11: Question 21a. Leonard and Linda’s excluded gain is \$220,000 since it does not exceed the \$500,000limit for married filing jointly. They must recognize \$220,000. This can be calculated asfollows:\$100,000Cost\$350,000Realized Amount\$30,000Improvements(\$130,000)Basis\$130,000Basis\$220,000Gainb. Leonard and Linda’s excluded gain is \$370,000 since it does not exceed the \$500,000limit for married filing jointly. They must recognize \$370,000. This can be calculated asfollows:\$100,000Cost\$700,000Realized Amount\$200,000New Purchase(\$330,000)Basis\$30,000Improvements\$370,000Gain\$330,000Basisc. Leonard and Linda would recognize a \$50,000 loss. This can be calculated as follows:\$100,000Cost\$80,000Realized Amount\$30,000Improvements(\$130,000)Basis\$130,000Basis\$50,000Loss
Ch. 11: Question 29The exchanges that qualify as a like-kind exchange are:
Ch. 11: Question 33a. Emma’s realized gain is \$5,000 and her recognized gain is \$5,000. Her basis in the newproperty is \$23,000. This can be calculated as follows:\$23,000FMV\$25,000Old Basis\$7,000Boot(\$7,000)Boot\$30,000\$5,000Gain(\$25,000)
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Term
Fall
Professor
fabioambrosio
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basis, Apartment, The new black