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Federal income taxation assignment

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Question;1.Brittany started a law practice as a sole proprietor. She owned a computer, printer;desk and file cabinet she purchased during law schools (several years ago) that;she is planning to use in her business.;What is the Brittany?s;initial basis for each asset, given the following information?;What is Brittany?s basis for;computing depreciation for each asset, given the following information?;Asset;Purchase Price;FMV at time Converted to Business Use;Computer;$ 2,500;$ 800;Printer;300;150;Desk;1,200;1,000;File Cabinet;200;225;2.ABC Company purchases all the assets of John's Saw Shop. Details on basisand fair market values of John's Saw Shop's assets are as follows: Adjusted Fair MarketAsset Basis ValueInventory $ 10,000 $ 27,000Machinery & Equipment 2,000 12,000Land 8,000 15,000Building 20,000 6,000a. What is ABC's basis in the assets purchased if ABC pays $40,000 for them?b. What is ABC's basis in the assets purchased if ABC pays $70,000 for them?c. What is ABC's basis if John's Saw Shop is a corporation and ABC purchasesall John's stock for $60,000?3.Jesse's grandfather dies on April 13 of the current year. Jesse inherits thefollowing property: FMV FMVProperty Basis April 13 Oct. 13Land $ 5,000 $ 20,000 $ 13,000Stock 14,000 10,000 12,000Watch 50 500 500a. What is Jesse's basis in the inherited property?b. What is Jesse's basis in the property if the executor of the estate elects thealternate valuation date?c. Assume that the executor elects the alternate valuation date and distributestitle to the land to Jesse on June 23 of the current year, when the fair marketvalue of the land is $17,000. What is Jesse's basis in her inherited property?d. Assume that the executor elects the alternate valuation date and distributes theproperty to Jesse on December 2 of the current year, when the fair marketvalues are $15,000 for the land, $11,500 for the stock, and $500 for the watch.What is Jesse?s basis in her inherited property?

 

Paper#37604 | Written in 18-Jul-2015

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