Chapter 9 w Solutions

Chapter 9 w Solutions - Burkett — Tax 1 — Chapter 9...

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Unformatted text preview: Burkett — Tax 1 — Chapter 9 Fair Market Value Allocation of Basis / Joe paid $120K plus $5K of closing costs (attorney fees, cost of ‘ appraisal, title insurance, etc.) for a building and the land on which it was located to be Used in his business. The appraisal that wasused to secure the loan for the purchase indicated that the F MV of the building was $100K and the land $30K. What is Joe’s basis in the land & the building? Ear-3505M; \1s'\¢><\OO/l30 '5‘— Qéalgflki V LMLQ \vsflé X37130: 258 “We BAP-um... . , Tu W. DOW-t SK “=— @9060 Burkett — Tax 1 — Chapter 9 ‘7 Basis of Property Acquired by Gift FMV > Basis on date of gift, Ex. 23, page- Cl , (q Gift of land. FMV is $50K, donor’s basis is $40K 6: gift tax is $5K. What is donee’s basis? —\- MG» :39“ Thu. cN fimfi éifixmegp; g was; " If FMV < Donor’s basis on date of gift, EX 24-25, page I. $10 Gift of land. FMV is $28K, Donors basis is $40K & Gift Tax is $3K. What is donee’s basis, gain (loss) & holding period if later sells? Basis for gain? l—Haifl /305... W3 :53 Sm> - Basis for loss? 2 QACN it] > Sale price $46,000 $24,000 ‘ $33,000. Basis U: o. 005) j ‘ Gain (Loss) Qt, (L7on ‘ . Hold Period 5 k Starts? CNN <3qu - DMJTE-E N $93“ (2; *2” Burkett — Tax 1 — Chapter 9 Basis in Property Converted From Personal to Business Use If FMV > Personal basis at the time of conversion Place personal asset in business when FMV is $50K & basis is $30K. Sell after taking $7K depreciation. a? I I o I 5.0“; .3 Ba51s for depreciation? 50 V; > _ 3 o Adjusted basis for gain or (loss)? gee... sums. s: 2...”; EC- . If Personal basis > FMV at the time of conversion See EXS. 33-36, pp. -. CL .3. L} - Place personal asset in business when FMV is $30K & basis is $50K. Sell after taking $7K depreciation. What is the adjusted basis & gain (loss) if the asset is sold? m Basis for depreciation? my M5; €17 K Adjusted basis for Gain? 50}; _-~ 1K,- :: Q3531 30m, *7 We 3'ng Adjusted basis for loss? Sales price $60, 000 $20,000 $35,000 Adj Basis j Gain (Loss) KR -. Burkett — Tax 1 — Chapter 9 Non-Taxable Stock Dividends A Owns 1000 Common Shs of AB Corp FMV =$50/Sh Adjusted Basis = $11/sh = $11,000 AB declares a 10 % Common Stock Dividend ?Taxable distribution? N 0 Why? his) CbL/ANQfi awwéggsigypa ? A’s basis in common stock after receipt of stock dividend? -\ at) sites iii if? it g S on 75 a Q3 ‘52. 3.» {iii M i Instead AB declares a preferred stock dividend A receives 100 shares of preferred stock with a FMV of $30/Sh ?Taxab1e distribution? N Q Why? gfigfi?‘ Na?” no»: side‘s? ? A’s basis in common & preferred stock after receipt of stock dividend? FM; NW C i, s C mam Mme sits x " satin-a5 gm; gems me 2:2. mi??? 0‘ gm“ ‘1" W gar-W? “5128343 “a §.§iév& mi: sag fiw i! 000 m {Seem iéfima miss-s) i ROCK; ‘fiag‘g was. $35??? $3 33%" in"??? @gfga 2 ice “3 Ga. 3‘3 5:? wwwmfiMV Jfliwfifiwa ET VKWVWW 93an £08m 0% E g8 859800 .83me 3mm: 2: 32 A: 2: 055mm< mg L¢W ONQW Rn WIWBIW\ DOCMT . N m dofi A: awEOfiJw X 003W 30 DPwa .4, ifllmnmuwx vim 00m $0qu 30on we $.52? Bu: 0% mo mag 08 ousmfioo 95% 3m 02% fl 03$ m: 585 #0on Umflw mo 8.8% com mohswom can meE 06 we saw 82805 Eu 2% ofismm< if 933;? dag E»... u Eviflgufi .n E.“ «3 “hzfiufl Amino,ij 433. \gmfnwfi. xéoifiw its “dcwfiu . .meE #85 2: Q £0on 2: 8 Emma— 330:4 .mm mw Emu Sumo mo 03? 2F gnaw Sm mwm Mom #0on Um? go 8QO fl EB 83 on “Emu £0on :08 H8 30:? flaw? M83 003 $5608 mm .ooodm 90 mass m. was ooofiwm mo >Em a 5:3 Moog Omamo 8.53m o3 £36 “33me a ofismm< mafia fism 2 “gm m 3530 1 _ MEL I 3835mm flymuwfigfltfl 1V10EM. @wfiw .H Mfim 11M? pm jfibHEAW . \hfiwoofiw dewx H TOUWW (odor; 4‘7 NEW .0 , 9 30on #588398 E mmmmm Qw Mom Nfimoho no @838an 963 33% cm bzo 33 cm mfismmawfigv rl away, 0W4 M®%HfirmeViflggfifloh;yroknbflmmmljm .hhflé H/N H. 3/“?ka mS¢WH «am 00, abmwé $0on Ewfioofime E mmmmm . .vuumm How NSQNQS no 88559 0.53 mouwnm o2 :3 E oasmm< Q3 . 1% H. i/nnl iWfl 3.8 no Eme .35 Q: no Mama How mtmozo no Emgfiwg 8.8% 233$ infirm nag/w 2H ImHQan dud/W 4.. Ix L1 4W8 OW L.0 .r awe... anO 4. lip... H ON! Mum». 60 W 2 any J Q J Q 9 9 m. have .. Sim 2338 no mama 2: afififlwafiefiwww é 33$ so 28 2 was 8% $83 mi 853 ‘ _ 38¢ .05 “31¢ .xm 0% why—am Swag I mumwmhfloom Em mmmflm— a banno I # «SH I Exam ...
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Chapter 9 w Solutions - Burkett — Tax 1 — Chapter 9...

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