Exam 12: Special Property Transactions

Samantha exchanges a truck used in her business with Phyllis for another truck.The basis of Samantha's old truck is $25,000,FMV is $33,000,and she gives Phyllis cash of $7,000.Phyllis's basis in her truck is $35,000 and its FMV is $40,000.What is Samantha's adjusted basis in the new truck she receives?

Dr.and Mrs.Spankle purchased a residence on January 12,2012,for $250,000.On May 15,2016,they sold the residence for $360,000,and paid selling expenses of $18,000.They purchased a new home for $354,000.Determine the Spankles' realized and recognized gain.

The gross profit percentage is typically the gross profit divided by the contract price.

On July 1,2016,DJ sold equipment used in her business and reported the gain using the installment method.Her adjusted basis in the equipment was $150,000.The equipment was subject to $30,000 of depreciation recapture.DJ sold the property for $250,000,with $100,000 due on the date of the sale and $150,000 plus interest at the Federal rate)due on August 1,2017.What is the amount of gain recognized in 2016?

When a taxpayer is released from a liability in a like-kind exchange,the amount of the release:

If one spouse sells a home and excludes the gain on the sale,the gain on the sale of a residence by the other spouse is:

Ko exchanges computer equipment five-year property)with an adjusted basis of $9,000 for a business auto five-year property)worth $6,000.Ko also receives cash of $5,000.What are the recognized gain or loss and the basis of the new auto?

On December 28,2016,Misty sold 300 shares of Low Grade,Inc.a publicly traded company)at a loss of $8,500.On January 5,2017,thinking that the stock price would rebound,Misty purchased 200 shares of Low Grade,Inc.for $7,000.What is the amount of the recognized loss on the December 28,2016 sale and what is Misty's basis in the 200 shares she purchased on January 5,2017?

The purpose of the wash sale rules is to disallow a tax loss on the sale of securities where the ownership of a company is not reduced.

An installment sale of a building used in a trade or business is reported on what form?

On February 12,2016,Nelson sells stock basis $175,000)to his son Wayne for $150,000,the stock's fair market value on the date of the sale.On October 21,2016,Wayne sells the stock to an unrelated party.In each of the following independent cases,determine the tax consequences of the transactions to Nelson and Wayne. a.Wayne sells the stock for $140,000. b.Wayne sells the stock for $180,000. c.Wayne sells the stock for $165,000.

The receipt of boot in a like-kind exchange causes the recognition of a realized gain.

The state condemned Cassidy's land on November 25,2016.The land has a $400,000 basis.Cassidy received insurance proceeds of $610,000 on January 27,2017.Cassidy has until what date to defer the gain under the involuntary conversion rules?

On December 28,2016,Shelia sold 300 shares of Power Inc.a publicly traded company)at a loss of $5,900.On January 5,2017,Shelia repurchased 300 shares of Power Inc.

The holding period of property received in a like-kind exchange:

If a taxpayer excludes the gain on the sale of his personal residence and,within two years,sells a second residence,he or she can exclude up to $250,000 for a single taxpayer):

A warehouse with an adjusted basis of $125,000 was destroyed by a tornado on April 15,2017.On June 15,2017,the insurance company paid the owner $195,000.The owner reinvested $170,000 in a warehouse.What is the basis of the new warehouse if non-recognition of gain from an involuntary conversion is elected?

When a loss is disallowed under the wash sale rules,

Richard's business is condemned by the state on July 10,2016,as part of a plan to add a highway loop around the city.His adjusted basis in his business is $500,000.He receives condemnation proceeds of $610,000 on August 30,2016.He purchases another business for $575,000 on September 15,2016. a.What is Richard's realized and recognized gain or loss? b.What is Richard's basis in the new business?

The IRC Section 121 exclusion of gain on the sale of a residence applies to the taxpayer's principal residence and a vacation home.