Summary of Transactions
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Basic Facts for 12 alternative cases
Mary bought a building and land for $400,000,.
The land is allocated a cost of $200,000 of the $400,000.
She claimed depreciation of $100,000 on the building.
She disposed of the property (when it was worth $1,300,000).
(Except when the building burned, in that case she built another building.)
She sells it for cash of $1,300,000.
She sells it for $1,300,000 on the installment basis.
She loses the building in a fire, it is not insured.
a. Building was not insured.
b. Revised information – the building was insured for $500,000.
She built a new building at a cost of $520,000.
Change assumption, assume it was her home and she sold it at a large gain.
She exchanges it for a similar building worth $1,300,000.
She exchanges it for a similar building worth $1,300,000, in a 3-party exchange.
She trades the building for another building, under 3 alternative transactions
Different cases involve different values, and cash payment or debt assumption.
She trades it for IBM stock worth $1,300,000.
She trades it for land worth $1,300,000 to be held as an investment.
She buys a new building after the city condemns her current
building (involuntary conversion) and pays her $1,300,000 for it.
She invests the building in a new corporation and
receives stock worth $1,300,000.
She invests the building in a new partnership and
receives a partnership interest worth 1,300,000.