Property Plant and Equipment Paper 7


Pat Leif owned an apartment house that he bought in 2000. Depreciation was taken on a straight-line basis. In 2013, when Pat’s adjusted basis for this property was $200,000, he traded it for an office building having a fair market value of $600,000. The apartment house has 100 dwelling units, while the office building has 40 units rented to business enterprises. The properties are not located in the same city. What is Pat’s reportable gain on this exchange?


On July 1, 2013, Riley exchanged investment real property, with an adjusted basis of $160,000 and subject to a mortgage of $70,000, and received from Wilson $30,000 cash and other investment real property having a fair market value of $250,000. Wilson assumed the mortgage. What is Riley’s recognized gain in 2013 on the exchange?


On October 1, 2012, Donald Anderson exchanged an apartment building having an adjusted basis of $375,000 and subject to a mortgage of $100,000 for $25,000 cash and another apartment building with a fair market value of $550,000 and subject to a mortgage of $125,000. The property transfers were made subject to the outstanding mortgages. What amount of gain should Anderson recognize in his tax return for 2012?


An office building owned by Elmer Bass was condemned by the state on January 2, 2011. Bass received the condemnation award on March 1, 2012. In order to qualify for nonrecognition of gain on this involuntary conversion, what is the last date for Bass to acquire qualified replacement property?


In March 2012, Davis, who is single, purchased a new residence for $200,000. During that same month he sold his former residence for $380,000 and paid the realtor a $20,000 commission. The former residence, his first home, had cost $65,000 in 1993. Davis added a bathroom for $5,000 in 2008. What amount of gain is recognized from the sale of the former residence on Davis’ 2012 tax return?


The following information pertains to the sale of Al and Beth Oran’s principal residence:
Date of sale February 2013
Date of purchase October 1996
Net sales price $760,000
Adjusted basis $170,000
Al and Beth owned their home jointly and had occupied it as their principal residence since acquiring the home in 1996. In June 2013, the Orans bought a condo for $190,000 to be used as their principal residence. What amount of gain must the Orans recognize on their 2013 joint return from the sale of their residence?


Ryan, age fifty-seven, is single with no dependents. In January 2013, Ryan’s principal residence was sold for the net amount of $400,000 after all selling expenses. Ryan bought the house in 2000 and occupied it until sold. On the date of sale, the house had a basis of $180,000. Ryan does not intend to buy another residence. What is the maximum exclusion of gain on sale of the residence that may be claimed in Ryan’s 2013 income tax return?


Miller, an individual calendar-year taxpayer, purchased 100 shares of Maples Inc. common stock for $10,000 on July 10, 2012, and an additional fifty shares of Maples Inc. common stock for $4,000 on December 24, 2012. On January 8, 2013, Miller sold the 100 shares purchased on July 10, 2012, for $7,000. What is the amount of Miller’s recognized loss for 2013 and what is the basis for her remaining fifty shares of Maples Inc. stock?


Smith, an individual calendar-year taxpayer, purchased 100 shares of Core Co. common stock for $15,000 on December 15, 2012, and an additional 100 shares for $13,000 on December 30, 2012. On January 3, 2013, Smith sold the shares purchased on December 15, 2012, for $13,000. What amount of loss from the sale of Core stock is deductible on Smith’s 2012 and 2013 income tax returns?
2012 . . . . 2013


On March 10, 2012, James Rogers sold 300 shares of Red Company common stock for $4,200. Rogers acquired the stock in 2009 at a cost of $5,000.
On April 4, 2012, he repurchased 300 shares of Red Company common stock for $3,600 and held them until July 18, 2012, when he sold them for $6,000.
How should Rogers report the above transactions for 2012?


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