3 Sebastian purchases two pieces of equipment for 100000 Appraisals of the

# 3 sebastian purchases two pieces of equipment for

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LO.3 Sebastian purchases two pieces of equipment for \$100,000. Appraisals of the equipment indicate that the fair market value of the first piece of equipment is \$72,000 and that of the second piece of equipment is \$108,000. What is Sebastian’s basis in these 31.LO.3 Juliana purchased land three years ago for \$50,000. She gave the land to Tom, her brother, in the current year, when the fair market value was \$70,000. No gift tax is paid on the transfer. Tom subsequently sells the property for \$63,000.a.What is Tom’s basis in the land, and what is his realized gain or loss on the sale? b.Assume instead that the land has a fair market value of \$45,000 and that Tom soldthe land for \$43,000. Now what is Tom’s basis in the land, and what is his realized
gift, dual basis rules apply to the gift. Tom has a gain basis of \$50,000 (Juliana’s basis) and a loss basis of \$45,000 (the land’s fair market value on the date of the gift). When Tom subsequently sells the property for \$43,000, his basis is \$45,000 (the loss basis) and he has a realized loss of \$2,000. 32.LO.4 Lisa sells business property with an adjusted basis of \$130,000 to her son, Alfred, for its fair market value of \$100,000.a.b.What is Alfred’s recognized gain or loss if he subsequently sells the property for