Ch_10_Questions - Income Tax I Name _Christian Yimgnia_...

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Income Tax I Name __Christian Yimgnia____ Chapter 10 Questions Explain and/or discuss the following based on reading the chapter and viewing the power points. Be thorough with your answers. You may take all the space you need. 1. Describe and explain the factors determining gain or loss. Realized gain or loss is determined by the difference between the amount realized from the sale or other disposition of property and the adjusted basis at the time of sale or disposition. If the amount realized exceeds the adjusted basis, there is a realized gain. However, if the adjusted basis exceeds the amount realized, there is a realized loss. If a realized gain or loss is recognized, the gain in includible and the loss is deductible in determining taxable income. 2. Describe and explain the factors related to the determination of basis. To determine whether there was a loss or gain one a sale or disposition of property, the basis of that property is to be found. The original basis for any property is how much it costs. The cost is the amount paid for such property in cash or other property. The cost also includes the amount of mortgage or liability incurred in connection with the purchase. There is also basis allocation where the total cost must be allocated among the separate properties according to their relative fair market values. 3.
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This note was uploaded on 11/26/2011 for the course INCOME TAX 4404 taught by Professor Bulie during the Spring '11 term at University of Minnesota Duluth.

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Ch_10_Questions - Income Tax I Name _Christian Yimgnia_...

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