BUSA427_Chapter10 - Chapter 10 Ch 10 Question 23 Albert Armstrongs basis in the building at the time of sale was \$450,000 It can be calculated as

# BUSA427_Chapter10 - Chapter 10 Ch 10 Question 23...

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Chapter 10Ch. 10: Question 23Albert Armstrong’s basis in the building at the time of sale was \$450,000. It can be calculated as follows:\$570,000 + \$60,000 + \$40,000 + \$150,000 + \$50,000 = \$870,000\$870,000 - \$420,000 = \$450,000 basisAlbert Armstrong’s realized gain on sale of the building is \$350,000. His recognized gain on sale of the building is also \$350,000 since no additional information was given. It can be calculated as follows:\$800,000 - \$450,000 = \$350,000Ch. 10: Question 28Gail’s basis in the land is \$112,500. Her basis in the building is \$450,000. Her basis in each truck is \$22,500 and \$45,000. It can be calculated as follows:Land:\$125,000\$630,000 x (\$125,000 / \$700,000) = \$112,500Building: \$500,000\$630,000 x (\$500,000 / \$700,000) = \$450,000Truck 1: \$ 25,000\$630,000 x (\$ 25,000 / \$700,000) = \$ 22,500Truck 2: \$ 50,000\$630,000 x (\$ 50,000 / \$700,000) = \$ 45,000\$700,000 combined FMVCh. 10: Question 31Naomi’s basis of preferred shares after the dividend is \$4,444. Her basis of common shares is \$3,556. It can be calculated as follows:FMV of Preferred Stock: 200 shares x \$75 = \$15,000FMV of Common Stock: 200 shares x \$60 = \$12,000
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