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1. Jocasta owns an apartment complex that she purchased 6 years ago for $750,000

ID: 2377302 • Letter: 1

Question

1.  Jocasta owns an apartment complex that she purchased 6 years ago for $750,000. Jocasta has made $40,000 of capital improvements on the complex, and her depreciation claimed on the building to date is $150,000. Calculate Jocasta

Jocasta owns an apartment complex that she purchased 6 years ago for $750,000. Jocasta has made $40,000 of capital improvements on the complex, and her depreciation claimed on the building to date is $150,000. Calculate Jocasta's adjusted basis in the building. Chrissy receives 200 shares of Chevron Texaco stock as a gift from her father. The stock cost her father $8500 10 years ago and is worth $10,000 at the date of the gift. If the stock is sold for $12500 calculate the amount of the gain or loss on the sale. If the stock is sold for $4600 calculate the amount of the gain or loss on the sale.

Explanation / Answer

1. Adjusted Basis = $750,000+$40,000 - $150,000 = $640,000

2.a. Gain = $4000 over a period of 10 years.
b. Loss = $3900 over a period of 10 years