Determine the adjusted basis

Assignment Help Finance Basics

Reference no: EM1362001

39. Cassandra sells property for a sales price of $150,000. In addition, Lana, the buyer, pays $5,000 in property taxes that had accrued during the year while the property was still legally owned by Cassandra. Cassandra paid $9,000 in commissions and $1,500 in legal fees connected with the sale of her property. What is the amount realized by Cassandra from the sale of her property?
a. $155,000.
b. $150,000.
c. $141,000.
d. $144,500.
e. $139,500

Chapter 14

40. Guthrie purchased his home for $300,000. As a sole proprietor, he operates a certified public accounting practice in his home. For this business, he uses one room exclusively and regularly as a home office. In Year 1, $1,450 of depreciation expense on the home office was deducted on his income tax return. In Year 2, Guthrie sustained losses in his business; therefore, no depreciation was taken on the home office. Had he been allowed to deduct depreciation expense, his depreciation expense would have been $1,700. What is the adjusted basis in the home?
a. $295,000.
b. $296,850.
c. $298,550.
d. $300,000.
e. None of the above.

hapter 14

41. Lolita purchases a business for $650,000. The fair market value of the assets of the business is as follows:

Equipment $ 350,000
Building 250,000

What is Lolita's cost basis in each asset?
a. $350,000 equipment, $250,000 building, $0 goodwill.
b. $379,167 equipment, $270,833 building, $50,000 goodwill.
c. $350,000 equipment, $250,000 building, $50,000 goodwill.
d. $379,167 equipment, $270,833 building, $0 goodwill.
e. None of the above.

Chapter 14
42. Garnet, Inc., owns a delivery truck which initially cost $30,000. After depreciation of $15,000 had been deducted, the truck was traded-in on a new truck that cost $40,000. Garnet was required to pay the car dealer $20,000 in cash. What is Garnet's basis for the new truck?
a. $0.
b. $35,000.
c. $40,000.
d. $45,000.
e. None of the above.

43. Paul exchanges a business machine, which has an adjusted basis of $50,000, for a new machine worth $40,000. In addition, he receives cash of $20,000. What is the recognized gain or loss and the basis of the new machine?
a. $0 and $30,000.
b. $0 and $40,000.
c. $10,000 and $40,000.
d. $10,000 and $50,000.
e. None of the above.

Reference no: EM1362001

Questions Cloud

Compute the price elasticity of demand for good x : Compute the price elasticity of demand for good X between the two prices on the demand curve. Describe the price elasticity of demand for good X.

Health and fitness professionals : Debate on this subject continues to a topic of ongoing discussions among health and fitness professionals, often polarizing their applications of flexibility training.

Explain the economic price for the customer is indicated : Explain The economic price for the customer is indicated in the exhibits However the price must match the costs for the customer.

Research for a dissertation project : Finding a Dissertation Topic - How would you research for a dissertation project in this manner? Give us examples of your process?

Determine the adjusted basis : Cassandra sells property for a sales valueof $150,000. In addition, Lana, the buyer, pays $5,000 in property taxes that had accrued during th year while property was still legally owned through Cassandra.

Why do farmers landowners have an incentive : Why do farmers landowners have an incentive to maintain the productivity of their land over time.

What is the mechanical energy lost due to friction : A sledge loaded with bricks has a total mass of 17.8 kg and is pulled at constant speed by the rope inclined at 20.4° above the horizontal. The sledge moves a distance of 20.7 m on a horizontal surface. The coefficient of kinetic friction between ..

Responsibilities of job when designing digital portfolio : Do you think that your digital portfolio should depend on the job, title, or industry you are planning or working on getting into? Do task and responsibilities of a specific job matter when designing your digital portfolio?

Postural position-development of muscular imbalances : This prolonged, in-active postural position contributes to the development of muscular imbalances that have a pronounced effect on head, shoulder, spine, hip, and ankle position.

User Account

All Pages