In Year 1, a taxpayer buys undeveloped land (Tract 1) for $50,000. In Year 3, when...
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In Year 1, a taxpayer buys undeveloped land (Tract 1) for $50,000. In Year 3, when Tract 1 is worth $80,000, the taxpayer is offered other undeveloped land (Tract 2) in trade. Because this other land is only worth $70,000, the taxpayer demands and gets an additional cash payment of $10,000. In Year 5, Tract 2 is sold for $100,000. What is the taxable gain to the taxpayer? In Year 1, a taxpayer buys undeveloped land (Tract 1) for $50,000. In Year 3, when Tract 1 is worth $80,000, the taxpayer is offered other undeveloped land (Tract 2) in trade. Because this other land is only worth $70,000, the taxpayer demands and gets an additional cash payment of $10,000. In Year 5, Tract 2 is sold for $100,000. What is the taxable gain to the taxpayer?
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Answer rating: 100% (QA)
To determine the taxable gain we need to calculate the taxpayers basis in Tract 2 which includes the ... View the full answer
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
Posted Date:
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