Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later

Question:

Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later when the land is worth $45,000, Elane gives it to Jacob, her son. (No gift tax resulted.) Shortly thereafter, Jacob sells the land for $48,000.

a. Assuming that Sheila's adjusted basis for the land is $24,000, what are Sheila's and Jacob's recognized gain or loss on the sales?

b. Assuming that Sheila's adjusted basis for the land is $60,000, what are Sheila's and Jacob's recognized gain or loss on the sales?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

South Western Federal Taxation Individual Income Taxes 2017

ISBN: 9781305873988

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen

See More Books

Question Posted: May 25, 2015 06:23 AM

See More Questions

When does the distributing corporation recognize gain or loss on the distribution of stock or securities of a controlled corporation to its shareholders?
In the previous problem, suppose the fair market value of Jamess fixed assets is $i,000 versus the $8,900 book value shown. Jurion pays $23,000 for James and raises the needed funds through an issue...
In Problem 30.3, suppose the fair market value of Jamess fixed assets is $12,000 versus the $7,100 book value shown. Jurion pays $17,000 for James and raises the needed funds through an issue of...
Why is it helpful to understand leadership as a theory while managing a healthcare-orientated organization? Justify your stance using two examples. What factors do you think should appear in a model...
In terms of their appearance as a graph, what is the difference between the CML and the SML?
On June 1, Year 3, Forever Young Corp. (FYC) ordered merchandise from a supplier in Turkey for Turkish lira (TL) 217,000. The goods were delivered on September 30, with terms requiring cash on...
Using the same parameters as in Example 15.2. find the value of the 5-month call if the initial value of the stock is $\$ 63$. Hence estimate the quantity $\Delta=\triangle C / \Delta S$....
Beginning inventory, purchases, and sales for ZT901 are as follows: Assuming a perpetual inventory system and using the weighted average method, determine (a) The weighted average unit cost after the...
The reward to risk ratio is 7.5 percent and the risk-free rate is 4.5 percent. What is the expected return on a risky asset if the beta of that asset is 1.25?
3. Answer the following question about the interactive garment editing and modeling system. Consider a physical system that comprises two 1D variables a and y, and the stable configuration is...
Dan bought a hotel for $2,600,000 in January 2010. In May 2014, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2014...
Tyneka inherited 1,000 shares of Aqua, Inc. stock from Joe. Joe's basis was $35,000, and the fair market value on July 1, 2014 (the date of death), was $45,000. The shares were distributed to Tyneka...
The following items were taken from the financial statements of Wilson Inc. for 2012: Accounts payable ...........$15,780 Accounts receivable .......... 8,470 Advertising expense .......... 4,200...
Terry Thompson, who meets all the requirements of Section 1237, sells five lots during 2018 at a gain of $30,000. During 2019, he sells the sixth lot (basis $5,000) at a selling price of $20,000 and...
Caswell bought a gas grill to give to his friend, Kile, as a birthday present. The grill exploded the first time it was used due to a factory defect, and Kile was injured. The manufacturer of the...
A city levied $2,000,000 of property taxes for its current fiscal year. The city collected $1,700,000 cash on its taxes receivable during the year and granted $72,000 in discounts to taxpayers who...
Equipment purchased for county General Fund departments on a line of credit with a supplier cost $800,000 by year-end; $200,000 had been paid, including $4,000 interest. The county expects to repay...
On the night of February 28, Local 94 called a strike and some of its members began picketing the New York Posts printing facility in the Bronx, New York. For some time during that night, certain...
The following balances have been extracted from the books of Spinners & Co. at 31 December 2003. Further information 1. Stocks at 31 December 2003: 2. Expenses owing at 31 December 2003: 3. Expenses...
Distinguish among total-moisture content, free-moisture content, equilibrium-moisture content, unbound moisture, and bound moisture.
Determine Amoss gross income in each of the following cases. a. In the current year, Amos purchased an automobile for $25,000. As part of the transaction, Amos received a $1,500 rebate from the...
Determine the taxpayer's gross income for tax purposes in each of the following situations. a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 for corporate stock...
Determine the taxpayer's gross income for tax purposes in each of the following situations. a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of $300 for corporate stock...
Alpha Company is evaluating a make-or-buy decision. The unit material costs for circuit boards are $1.00 and the unit labor and allocated fixed costs are $2.00 and $4,000, respectively, for a...
A toy car rolls along a curved track as shown below. The track has a tall incline that gradually slopes downward to a ramp that makes a 40 angle with the horizontal. The car is placed at point A, at...
Courtland Incorporated owns a $1 million office building which it insures under a Building and Personal Property Coverage Form (BPP) with an 80 percent coinsurance provision. In an effort to reduce...

Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later

Question:

Step by Step Answer:

a Sale by Sheila Amount realized 40000 Adjusted basis 24000 Realized gain 16000 Recognized gain 1600...View the full answer

South Western Federal Taxation Individual Income Taxes 2017

Students also viewed these Business Law questions