CHAPTER 7 NOTES Fall 2009

CHAPTER 7 NOTES Fall 2009 - CHAPTER 7 NOTES TAX 4001 Spring...

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CHAPTER 7 NOTES TAX 4001 Spring 2010
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Major Concepts Realized Gain Basis Recognized Gain/Loss Holding Period Rules Like Kind Exchanges Involuntary Conversions
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Realized Gain Tax Consequences (Applicable to both  buyer and seller) related to selling  property: Amount Realized Less: (Adjusted Basis) = Gain or Loss Realized 1. Is the Gain or Loss  Recognized ? 2. If so, what is its  Character ? 3. What is the  Basis  of the  New  Property? 4. What is the  Holding Period  of the  New  
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Amount Realized  FMV of Cash and Other Property  Received Also includes Liabilities of the Seller that  are assumed by the Buyer
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Adjusted Basis  Generally, Cost Reduced by Depreciation  Allowed  or  Allowable  Inherited Property – FMV at Decedent’s  Date of Death (exception for Alt. Valuation  Date) Property Acquired by Gift- Gain Basis – Donor’s Basis + Gift Tax Paid on  Appreciation Loss Basis – Lesser of FMV or Donor’s Basis  on Date  of Gift Prevents deduction of nondeductible personal  losses of donor
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CHAPTER 7 NOTES Fall 2009 - CHAPTER 7 NOTES TAX 4001 Spring...

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