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ACC - Zack purchased a plot of land

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Question;Zack purchased a plot of land (plot A) for $150,000 in October of Year 1. He pays $15,000 in brokerage and legal fees associated with the acquisition of the land. In November of Year 7, Zack sells the land to Xavier for $300,000. In January of Year 8, Zack purchases another plot of land (plot B) for $200,000. In December of Year 8, Zack discovers that a zoning law will prevent him from building the hotel he planned to construct on the land. As a result, he sells the plot B for $180,000.What was Zack?s Adjusted Basis in plot A at the time of sale?What was Zack?s Adjusted Basis in plot B at the time of sale?How much tax does Zack owe in Year 7?How much tax does Zack owe in Year 8?

 

Paper#38568 | Written in 18-Jul-2015

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