Reference no: EM131258146
1. Reynaldo purchased a tract of land for $140,000 in 2012 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000. Highway engineers surveyed the property and indicated that he would probably get $180,000. The highway project was abandoned in 2016 and the value of the land fell to $100,000. What is the amount of loss Reynaldo can claim in 2016?
2. Linda owns land with an adjusted basis of $250,000, subject to a mortgage of $50,000. Real estate taxes are $12,000 per calendar year and are payable on December 31. On July 1, 2016, Linda sells her land subject to the mortgage for $300,000 in cash, a note for $300,000 and property with a fair market value of $75,000. What is the amount realized?
3. The bank forecloses on Rihanna's apartment complex. The property had been pledged as security on a nonrecourse mortgage, whose principal amount at the date of foreclosure is $900,000. The adjusted basis of the property is $500,000. What is Rihannas's recognized gain or loss?
4. Which of the following decreases adjusted basis?
A. amortization of bond premium
B. A corporate distribution to a shareholder treated as a return of capital in which a gain is recognized to the shareholder
C. Depreciation recapture
D. Only A and B
E. all of the above
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