tax quiz 10-2 - The adjusted basis of property is its cost...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
expenditures. Answer: True False Adjusted basis is cost plus capital expenditures minus capital recoveries. Correct Marks for this submission: 1/1. Question 2 Marks: 1 Brian Brewster sold property to a buyer who paid him $400,000 cash and assumed an existing mortgage of $150,000. The property had cost $250,000 and he had made improvements of $50,000. Depreciation of $100,000 has been claimed and selling expenses were $20,000. What is the amount of gain? Choose one answer. a. $100,000 b. $200,000 c. $250,000 d. $280,000 e. $330,000 The amount realized after selling expenses is $530,000 ($400,000 + $150,000 - $20,000) and the adjusted basis is $200,000 ($250,000 + $50,000 - $100,000). Therefore, the gain is $330,000 ($530,000 - $200,000). * This question has been adapted from the IRS Examinations. Correct Marks for this submission: 1/1. Question 3 Marks: 1 In 2011, Bob Brown's aunt Barbara gave him a house. At the time of the gift, the house had a fair market value of $193,000, the taxable gift was $180,000, and his aunt's adjusted basis was $73,000. His aunt paid a gift tax of $30,000 on the house. What is Bob's basis in the house for purposes of determining gain? Choose one answer.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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.

Page1 / 5

tax quiz 10-2 - The adjusted basis of property is its cost...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online