1. Frank bought XY Stock for $10,000 in 1999 and died on 3/10/2022 when it was...
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1. Frank bought XY Stock for $10,000 in 1999 and died on 3/10/2022 when it was worth $45,000. It was worth $40,000 on 9/10/2022, and $37,000 when it was distributed to Ellen by Frank's estate on 11/12/2022. (a) What is Ellen's basis if the alternate valuation election is not made? (b) What is Ellen's basis if the alternate valuation election is made? 2. Terry bought NNN stock for $12,000 and gave it to Tom as a gift when it was worth $7,500. (a) If Tom sells it for $6,000, how much of a loss does he have for tax purposes? (b) If Tom sells it for $12,400, how much of a gain does he have for tax purposes? 3. Ned bought FRF stock for $3,500 and gave it to Myra as a gift when it was worth $6,000. How much gain or loss, if any, does Myra have if she sells it for $4,700? 4. Pete has a basis of $300,000 in his factory. It was destroyed by fire in 2022 and he received $475,000 in insurance proceeds. He bought a new factory in 2023 for $430,000. (a) How much gain does his recognize? (b) What is his basis in the new factory? 5. Perry has a basis of $200,000 in his factory. It was destroyed by fire in 2022 and he received $312,000 in insurance proceeds. He bought a new factory in 2023 for $330,000. (a) How much gain does his recognize? (b) What is his basis in the new factory? 1. Frank bought XY Stock for $10,000 in 1999 and died on 3/10/2022 when it was worth $45,000. It was worth $40,000 on 9/10/2022, and $37,000 when it was distributed to Ellen by Frank's estate on 11/12/2022. (a) What is Ellen's basis if the alternate valuation election is not made? (b) What is Ellen's basis if the alternate valuation election is made? 2. Terry bought NNN stock for $12,000 and gave it to Tom as a gift when it was worth $7,500. (a) If Tom sells it for $6,000, how much of a loss does he have for tax purposes? (b) If Tom sells it for $12,400, how much of a gain does he have for tax purposes? 3. Ned bought FRF stock for $3,500 and gave it to Myra as a gift when it was worth $6,000. How much gain or loss, if any, does Myra have if she sells it for $4,700? 4. Pete has a basis of $300,000 in his factory. It was destroyed by fire in 2022 and he received $475,000 in insurance proceeds. He bought a new factory in 2023 for $430,000. (a) How much gain does his recognize? (b) What is his basis in the new factory? 5. Perry has a basis of $200,000 in his factory. It was destroyed by fire in 2022 and he received $312,000 in insurance proceeds. He bought a new factory in 2023 for $330,000. (a) How much gain does his recognize? (b) What is his basis in the new factory?
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QUESTION 1 A Ellens basis in the XY stock would be the fair market value of the stock on the date of Franks death which was 45000 This is because when assets are inherited the basis is steppedup to th... View the full answer
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young
Posted Date:
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