During the current year, Stan sells a tract of land for $800,000. The property w

Question

During the current year, Stan sells a tract of land for $800,000. The property was received as a gift from Maxine on March 10, 1995, when the property had a $310,000 FMV. The taxable gift was $300,000 because the annual exclusion was $10,000 in 1995. Maxine purchased the property on April 12, 1980, for $110,000. At the time of the gift, Maxine paid a gift tax of $12,000. In order to sell the property, Stan paid a sales commission of $16,000.
a. What is Stan’s realized gain on the sale?
b. How would your answer to Part a change, if at all, if the FMV of the gift property was $85,000 as of the date of the gift?

Irene owns a truck costing $15,000 and used for personal activities. The truck has a $9,600 FMV when it is transferred to her business, which is operated as a sole proprietorship.
a. What is the basis of the truck for determining depreciation?
b. What is Irene’s realized gain or loss if the truck is sold for $5,000 after claiming depreciation of $4,000?

Explanation / Answer

(a.)   The basis of the depreciation is FMV(fair market value) . That is $9,600

Note:-

     Depreciation of any asset is valued because to avoid taxes. Here we take 9600 instead of 15000 because after coming to business only we valued depreciation to valid tax benefits

(b.) lrenes realize loss of 600 . Because FMV is 9600 after depreciation(9600- 4000=5600). 5600 cost of asset is sold for 5000 so it is loss

Note:- For one post you have to post one question only so I answered for second

           Question only sorry to say

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