Exam 9: Acquisitions of Property

Determine the proper classification(s)of a house owned and used by Rhonda as her insurance agency office. I.Personal use property. IV.Intangible property. II.Business use property. V.Real estate. III.Tangible property. VI.Personal property. ​

David pays $35,000 cash and issues a mortgage note for $95,000 to purchase land.He pays $750 to his attorney for reviewing the purchase agreement.David's initial basis in the land is

Terry gives Brenda 1,000 shares of stock he had purchased several years ago for $5,000.On the date of the gift,the stock has a fair market value of $4,000.Brenda sells the 1,000 shares for $5,500 one month after the gift,Brenda realizes a

When a security is sold at a loss and and a substantially identical security has been purchased within 30 days before the sale date the loss is disallowed because it is classified as a wash sale.

Match each statement with the correct term below. -Realized gain

Indicate the classification of each of the following assets as personal property,real property,intangible property,personal use property or business use property. a.A dentist purchases a sofa for the waiting room at his dental office. b.A dentist purchases a sofa for his living room at home. c.A dentist has a landscape architect plant shrubbery and trees around his office building. d.A dentist pays a landscaper to grade his land and install fencing for a baseball practice field for his son. e.A dentist obtains a patent for a procedure he developed.

If the executor of a decedent's estate elects the alternate valuation date and none of the estate's property is sold or distributed before the alternate date,the estate's assets are valued as of how many months after the date of death?

Tien purchases an office building for $400,000,paying a $75,000 cash down payment and borrowing $325,000 from Atlantic Meridian Mortgage Co.The purchase price is properly allocated 90% to the building and 10% to the land.Two years after the purchase,Tien remodeled one floor of the building at a cost of $25,000.Annual maintenance costs and property taxes total $4,000.A total depreciation of $36,000 is deducted over the 3 years.Determine the adjusted basis of the building and the land as of the end of year 3:

Determine the year-end adjusted basis of Roberto's 1/2 interest in the Halifax Partnership.At the beginning of the year,Roberto's adjusted basis is $80,000.The net operating profit of the partnership is $90,000.Also,Halifax distributes $15,000 of cash to Roberto.

Match each statement with the correct term below. -Personalty

Match each statement with the correct term below. -Alternate valuation date

Morrris,an attorney,performs 5 hours of legal work for Andy.Morrris 's normal billing rate is $120 per hour.Andy,a software consultant,gives Morrris a new computer for his office in payment of the bill.The computer's adjusted basis was $500 and its fair market value is $550.Morrris ' basis in the computer is

Janet is the business manager for Greenville Auto Mart.She buys a new car from the dealership for $35,000.The basis of the car to the dealership was $30,000.The car lists for $42,00,but the dealer would sell the car for $40,000.What is Janet's basis in the new car?

Match each statement with the correct term below. -Tangible property

The split basis rule for determining the basis of gifts allows for one basis for determining losses and another for calculation of gains.

Determine the proper classification(s)of the asset discussed in the following scenario: Judge Marshall purchased a new gold-trimmed gavel to decorate his living room. I.Personal use property. IV.Intangible property. II.Business use property. V.Real estate. III.Tangible property. VI.Personal property. ​

Match each statement with the correct term below. -Realized loss

Hector receives a gift of rare books valued at $7,000.The books have an adjusted basis of $11,000 to the donor.Several months later,Hector sells the books to a professional collector for $8,000.What is Hector's gain or (loss)on the sale?

Lu is interested in purchasing the assets of Idaho Potato Chip Company.Idaho's assets are: ​ All of the following statements are correct except:

For each of the following situations,identify the property's adjusted basis and briefly explain how you determined the adjusted basis amount. a.Mei-ling purchased 150 shares of MAPCO stock for $5,400 in 2004. On February 28, 2016, Mei-ling purchased another lot of 150 shares of identical stock for $3,750. Mei-ling sells the original 150 shares of MAPCO stock for $3,300 on March 15, 2016. What is Mei-ling's basis in the 150 shares she purchased February 28, 2016? b.Ralph gives Linda 500 shares of Money Maker common stock. The stock cost Ralph $30,000 several years earlier. The stock is worth $50,000 on the date it is given to Linda, and Ralph pays $1,500 of gift tax on the transfer. What is Linda's basis in the stock if she sells it for $20,000? c.Assume the same facts as in part b, except that the fair market value of the stock on the date of the gift is $25,000. d.Leon receives a van as a gift from his father. His father's basis in the van is $30,000. The fair market value at the date of the gift is $20,000. A gift tax of $2,000 is paid on the gift. Geroge uses the van in his pizza delivery service for three years, at which time he sells it for $8,000. During the three years he used the van in his business, Geroge deducts $10,000 in depreciation on the van. e.Bonita owns a house that she used as a residence until this year. She paid $150,000 for the house on November 4, 2002. On April 4, 2016, Bonita purchases a new residence and converts the former residence into office space to use in her real estate business. The former residence is worth $180,000 on April 4, 2016.