(Non-Arm's Length Disposition of Depreciable Property) The following two independent Cases involve a non-arm's length disposition...

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(Non-Arm's Length Disposition of Depreciable Property) The following two independent Cases involve a non-arm's length disposition of a depreciable property. Case One Jason Lasarge owns a depreciable property with a FMV of $255,000. It has a capital cost of $187,000 and a UCC balance of $145,000. It is the only property in its class. He sells this property to his brother for cash of $255,000. Case Two Christine Drummond owns a depreciable property with a FMV $320,000. It has a capital cost of $520,000 and a UCC balance of $240,000. It is the only property in its class. She sells the property to her sister for cash of $320,000. Required: For each of the two cases, indicate the income tax consequences for the seller. In addition, indicate the tax costs of the depreciable property to the purchaser. (Non-Arm's Length Disposition of Depreciable Property) The following two independent Cases involve a non-arm's length disposition of a depreciable property. Case One Jason Lasarge owns a depreciable property with a FMV of $255,000. It has a capital cost of $187,000 and a UCC balance of $145,000. It is the only property in its class. He sells this property to his brother for cash of $255,000. Case Two Christine Drummond owns a depreciable property with a FMV $320,000. It has a capital cost of $520,000 and a UCC balance of $240,000. It is the only property in its class. She sells the property to her sister for cash of $320,000. Required: For each of the two cases, indicate the income tax consequences for the seller. In addition, indicate the tax costs of the depreciable property to the purchaser.

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Income Tax Consequences for the Seller Case One Capital Gain Since the FMV 255000 equals the sell... View the full answer