Rod Clooney purchases Kayla Mitchells sole proprietorship for $990,000 Communications on August 15, 2021. The assets of

Question:

Rod Clooney purchases Kayla Mitchell’s sole proprietorship for $990,000 Communications on August 15, 2021. The assets of the business are:

a. Calculate Kayla’s realized and recognized gain.

b. Determine Rod’s basis for each of the assets.

c. Write a letter to Rod informing him of the income tax consequences of the purchase. His address is 300 Riverview Drive, Delaware, OH 43015.

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South-Western Federal Taxation 2022 Individual Income Taxes

ISBN: 9780357519073

45th Edition

Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman

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Question Posted: Jul 14, 2022 03:55 AM

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Rod Clooney purchases Kayla Mitchells sole proprietorship for $990,000 Communications on August 15, 2021. The assets of

Question:

Asset Accounts receivable Inventory Equipment Furniture and fixtures Building Land Total Sian's Adjusted Basis $ 70,000 90,000 150,000 95,000 190,000 25,000 $620,000 FMV $ 70,000 100,000 160,000 130,000 250,000 75,000 $785,000

Step by Step Answer:

A realized gain is 205000 990000 785000 recognized gain is 370000 990000 620000 B Ad...View the full answer

South-Western Federal Taxation 2022 Individual Income Taxes

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