Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2015 was $2,800,000. The fair market value six months later was $2,850,000. What is the basis of the property to Ed? What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?

Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2015 was $2,800,000. The fair market value six months later was $2,850,000. What is the basis of the property to Ed? What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 29P

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Similar questions

Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died andleft the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2015 was $2,800,000. The fair market value six months later was $2,850,000.a. What is the basis of the property to Ed?b. What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?
Franco converted a building from personal to business use in May 2018 when the fair market value was $27,500. He purchased the building in July 2015 for $44,000. On December 15 of this year, Franco sells the building for $22,000. On the date of sale, the accumulated depreciation on the building is $2,815. What is Franco's recognized gain or loss on the sale?
John purchased an office building in 2010 for $450,000. In 2020 he sells the building for $950.000. John's remaining mortgage on the building was $150,000. The buyer paid $650,000 and assumed the remainig debt on the building. John had taken $100,000 depreciation on the building. Calculate: a Adjusted basis in the building b Any realized gain or loss on the building
In 2018, José purchased a house for $263,000. He used the house as his personal residence. In May 2021, when the fair market value of the house was $346,900, he converted the house to rental property. what is the cost recovery for 2021?
Danielle has an apartment building that she bought in 1997 for 900,000. The total depreciation taken equals 200,000. In 2018 she traded it with a vacant parking lot having a fair market value of 800,000. This is considered a like-kind exchange. What is her basis in the parking lot?
Callie Cooper purchased two pieces of property in 1990: Property Q cost $15,000 and Property R cost $30,000. In 2020, when Callie died, she left the property to her daughter, Christy. At that time, Property Q had appreciated in value to $80,000 while Property R had declined in value, now worth only $10,000. What is Christy’s basis in each piece of property? What are the tax consequences of the changes in value of the properties from the time of original purchase to the death of Callie?
Johnson tells Davis that he paid $150,000 for his farm in 2013 and that he believes it is worth twice that at the present time. Relying upon these statements, Davis buys the farm from Johnson for $225,000. Johnson did pay $150,000 for the farm in 2013, but its value has increased only slightly, and it is presently not worth $300,000. On discovering this, Davis offers to reconvey the farm to Johnson and sues for the return of his $225,000. Result? b. Modify the facts in (a) by assuming that Johnson had paid $100,000 for the property in 2013. What result?
George purchased a lot in 2010 for $2,000,000 (he paid $1,200,000 and borrowed $800,000 from a bank), in the same year he built a small office building on the lot at a cost of $500,000. In 2015 he made improvements for $50,000. George sold the building for $3,000,000 in 2023. George's approximate depreciation was $50,000. a) What was his basis? b) Amount of gain realized? c) Amount of gain recognized?
Marcus sold a residential rental building for a gain of $30,000. He had originally purchased the building and placed it in service in March 2016 (for simplicity, the sale of land is not included in this question). The amount of depreciation allowed or allowable was $14,250. There were no other adjustments to the basis of the property, and Marcus did not sell any other property during the tax year. What is the amount and nature of Marcus's gain? (a) $15,750 gain taxed as a long-term capital gain, and $14,250 gain taxed at a maximum of 25%. (b) $15,750 gain taxed as a long-term capital gain, and $14,250 gain added to business income. (c) $30,000 gain taxed as a long-term capital gain, and $14,250 gain taxed at a maximum of 25%. (d) $30,000 gain taxed as a long-term capital gain, and $14,250 gain added to business income.
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Emil purchased an apartment building in 2016 for $200, 000 and made improvements over time in the amount of $50,000. The initial purchase included $15,000 for land value. Emil took all allowable depreciation, totaling $54, 000. He sold the entire property in 2022 for $350, 000, with no sale expenses. What are his total gains on the building and improvements only, reported in Part III of Form 4797?
In 2018, José purchased a house for $197,400. He used the house as his personal residence. In September 2021, when the fair market value of the house was $315,700, he converted the house to rental property. If required, round your answers to the nearest dollar. Click here to access depreciation tables in the textbook. a. José's basis for cost recovery for the property is $ b. Under MACRS, the cost recovery period for residential rental real estate is convention. c. The cost recovery for 2021 is $ years, and it is subject to the