Liv exchanges a small plot of land she owns for another small plot of land in an arms-length transation that qualifies as a Section 1031 like-kind exchange. The adjusted basis for her land is $140,000. The land she received in exchange has a fair market value of $240,000. In addition, Liv receives cash of $60,000

a. Calculate Liv’s realized gain or loss

b. Calculate Liv's recognized gain or loss.

c. Calculate Liv’s basis for the land received.

Fred owns a warehouse that was condemned by the city in 2020. Fred’s basis in the warehouse was $50,000 but he was awarded $90,000 as compensation by the city. Fred chose not to reinvest the money in another warehouse. Fred also had the following transactions in 2020:

Short-term capital gain of $ 4,000

Short-term capital loss ($12,000)

Long-term capital gain $ 8,000

Long-term capital loss ($20,000)

Section 1231 loss ($25,000)

Fred has an AGI of $150,000 without regard to the above. What is Fred’s tax consequences from all the foregoing?

Answer rating: 100% (QA)

a Calculate Livs realized gain or loss Realized Gain FMV of Land Received Adjusted Basis of Land Exc... View the full answer