(a.) What is the gain or loss that Stanley should report in 2010? (b.) What gain or loss should Stanley report if the value of the rights were $1.25 instead of $2.50? Betty Bell owns 1000 shares of Banner Corp. stock purchased in January 2008 for $30,000. On January 11, 84. 2010, she receives 300 taxable stock rights valued at $6 with the right to purchase additional shares at $32. (a.) How much income does Betty have? What is the basis in the rights? When does the holding period of the rights begin? (b.) On February 19, 2011, Brian exercises 150 rights and sells the remaining 150 rights for $8 each. What is the basis of each new share? When does the holding period begin? How much and what kind of gain does she have on the sale of the rights? Joe Juggler sold some common stock to his brother Tim for $12,000, the current market price. He paid 85. $15,000 for the stock two years ago. The stock market recovered rapidly and three months later Tim sold the stock to a business acquaintance for $16,000. How much gain or loss should Joe and Tim report? Mike Morgan gives Paul Piers property worth $35,000. Mike’s basis in the property is $30,000. 86. (a.) If Paul sells the property for $37,000, what is his gain or loss on the sale? (b.) If Paul sells the property for $25,000, what is his gain or loss? (c.) If the fair market value on the date of the gift is $27,000 and Paul sells the property for $24,500, what is his gain or loss? (d.) If the fair market value equals $27,000 and Paul sells the property for $28,000, what is the gain or loss? Brian Bradley purchased property for $50,000 in 2002. The property was valued at $200,000 on May 14, 87. 2010, when Brian died. His daughter Anita inherited the property. Six months later, on November 14, 2010, the property was valued at $170,000. (a.) What is Anita’s basis in the property? (b.) If the executor of Brian’s estate elected the alternate valuation date, what is Anita’s basis? (c.) If the executor elected the alternate valuation date but distributed the property on August 18, 2010, what is Anita’s basis? (d.) If the executor elected the alternate valuation date, but distributed the property on December 22, 2010, what is Anita’s basis? (e.) If Anita sells the property on December 27, 2010, will she have short-term or long-term gain or loss?
88. on January 1, 2018. She sells them on December 31, 2010, for $11,000. What are the tax consequences for Jane? 89. $150,000. Because of the unique styling of the home, she decided to convert it to rental property. One year later, after taking depreciation of $15,000, she is considering selling the property. Determine the results if she sells the property for: (a.) $130,000 (b.) $165,000 (c.) $220,000 In November 2010, Bill Barley sells property with an adjusted basis of $50,000 for $200,000. The buyer 90.
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