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1) Sanchez Company sold land for $100,000 to Belit...

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Question

1) Sanchez Company sold land for $100,000 to Belita Sanchez, who owns 60 percent of the outstanding stock of Sanchez. The company?s adjusted basis in the land is $120,000. a. Compute the company?s realized and recognized gain or loss on the sale of the land. b. What is Belita?s adjusted basis in the land? c. If Belita sold the land for $90,000 two years after she purchased it, compute her realized and recognized gain or loss. d. If Belita sold the land of $105,000 two years after she purchased it, compute her realized and recognized gain or loss. e. If Belita sold the land for $145,000 two years after she purchased it, compute her realized and recognized gain or loss. 2) Lopez Company transfers a computer used in its business that has an adjusted basis of $300 and an FMV of $1,000 to Greene Company and receives in exchange a laser printer with an FMV of $600 that it will use in its business and cash of $400. a. Calculate Lopez?s realized and recognized gain or loss. b. What is Lopez?s basis in the laser printer? 3) Garrison Corporation transfers unimproved land to Rucker Corporation and receives in exchange improved land with an FMV of $600,000 and $250,000 of cash. Rucker?s adjusted basis in the improved land is $750,000. Garrison?s adjusted basis in the unimproved land is $400,000 and the FMV of the land is $900,000. At the time of the exchange Garrison?s unimproved land is subject to a $200,000 mortgage that Rucker assumes. Rucker?s improved land is subject to a mortgage of $150,000 that Garrison assumes. a. Compute Garrison?s realized and recognized gain or loss on the exchange of the unimproved land and its basis in the newly acquired improved land. b. Compute Rucker?s realized and recognized gain or loss on the exchange of the improved land and its basis in the newly acquired unimproved land. 4) The business equipment of Connor Corporation was destroyed in a fire. The insurance company reimburses Connor $221,000. At the time of the fire, the adjusted basis in the equipment was $171,000. Two months after received the insurance proceeds, Connor Corporation purchases similarly functioning equipment that costs $215,000. a. Compute Connor?s realized and recognized gain or loss from the casualty. b. What is Connor?s basis in the new equipment/ 5) Grossman Company received land with a fair market value of $90,000 and $10,000 in cash from Francona Company. In exchange, Grossman transferred land to Francona that had an FMV of $100,000 and an adjusted basis of $130,000. a. Calculate the gain or loss that Grossman realized on the exchange. b. How much of Grossman?s realized gain or loss is recognized? c. What is Grossman?s adjusted basis in the land it received from Francona?

 

Paper#11223 | Written in 18-Jul-2015

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