Reference no: EM132808982
Jim Realty LLC, a partnership owned entirely by individuals, sells an apartment building for $15,500,000. The basis of the building immediately prior to the sale is as follows:
Original Cost - Unadjusted Tax Basis:
Land 3,000,000
Building 12,500,000
Furniture & Fixtures 75,000
Accumulated Depreciation:
Building (2,900,000)
Furniture & Fixtures (65,000)
Problem 1: Using the above information, determine the gain or loss on the sale of the apartment building to the individual owners.
Problem 2: Assuming that the allocation of the selling price is $3,500,000 to land, $11,950,000 to building and $50,000 to furniture and fixtures, estimate the total taxes for the owners on the sale.
Problem 3: If possible, pick an alternative allocation of the sales price to assets such that there would be a reduction in the total taxes and estimate the taxes based on your assumptions.
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