What was Sally's initial basis in the raw land when bought it? What is Sally's final adjusted
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- What was Sally's initial basis in the raw land when bought it?
- What is Sally's final adjusted basis in the land and building?
Sally bought raw land 5 years earlier for $100,000, Sally held the land for investment. At the time Sally acquired the land she also paid an attorney $10,000 to assist her in providing the legal services in connection with the land purchase which she capitalized into the purchase price.
A couple of years later Sally borrowed an additional $15,000 from a bank to construct a small building on the land.
Bob agreed to buy the land and building for $150,000. The purchase price was to be paid by Bob using $75,000 of his own cash and a bank loan of $75,000. The bank loan interest rate was set at the applicable federal rate of interest.
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
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