1. Ted, a sole proprietor, sells his office building to Sam. He originally purchased the building for $340,000. As of the date of the sale, Ted had recorded $140,000 of accumulated depreciation. His building was worth $240,000. Sam paid Ted $190,000 cash. In addition, Ted still owes $50,000 on debt incurred to purchase the building, and Sam is assuming this liability. Ted also paid a $5,000 commission to his realtor for facilitating the sale. What is Ted’s amount realized and what is Ted’s recognized gain or loss on the sale to Sam?

2. On May 15, 2019, Diane received a gift of 100 shares of stock from Fred. Fred had acquired the stock in 1990 for $20,000. At the time of the gift, the fair market value of the stock was $50,000. On November 30, 2019, Diane sold the stock for $52,000. What is the amount and character of Diane’s recognized gain or loss on the sale?

3.  In the current year, Debbie receives stock as a gift from her uncle, Jerry. Jerry had originally purchased the stock for $27,000 several years ago. At the time of the gift, the fair market value of the stock is $17,000. One month later Debbie sells the stock for $16,500. What is the amount and character of Debbie’s recognized gain or loss from the sale?

Answer rating: 100% (QA)

1 Step 1 Lets understand how to calculate the gain or loss on sales or asset We first needs to calcu... View the full answer