chpt 14 HW solutions

# chpt 14 HW solutions - Individual Tax Accounting 2011...

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Individual Tax Accounting – 2011 edition Chapter 14 Homework Solutions 29. Cost \$200,000 Add: Paving and sidewalks (\$7,000 + \$8,000) \$15,000 Elevator (\$20,000 – \$13,000) 7,000 22,000 Subtotal \$222,000 Deduct: Depreciation deductions claimed \$ 4,500 Casualty insurance proceeds 13,500 Casualty loss allowed 5,500 (23,500) Adjusted basis \$198,500 Amount realized (\$290,000 – \$17,400) \$272,600 Less: Adjusted basis (198,500) Realized gain \$ 74,100 pp. 14-4 to 14-6, Example 5, and Concept Summary 14.2 44. a. Basis for gain = \$40,000; \$92,000 (amount realized) – \$40,000 (adjusted basis) = \$52,000 (recognized gain). b. Basis for gain = \$22,000; \$40,000 (amount realized) – \$22,000 (adjusted basis) = \$18,000 (recognized gain). c. Basis for loss = \$15,000; \$9,000 (amount realized) – \$15,000 (adjusted basis) = \$6,000 (recognized loss). d. \$0. The proceeds of \$35,000 are between the gain basis of \$42,000 and the loss basis of \$30,000. Therefore, neither gain nor loss is recognized. Examples 18 to 20
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