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

3 sebastian purchases two pieces of equipment for

This preview shows page 10 - 12 out of 15 pages.

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

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture