This is part 3-5 of problem 6-58 3. Jaron owns a condominium downtown. He rented

Question

This is part 3-5 of problem 6-58

3. Jaron owns a condominium downtown. He rented it out 270 days during the year. He also allowed Laura and her husband to stay in the home rent- free for 24 days while they were looking for a place to stay. Fortunately, the condominium wasn't rented during the time they needed it. The following items of annual income and expense relate to the condominium: a. Rental income b. Interest c. Taxes d. Other expenses e. Depreciation $18,000 $3,150 $1,700 $6,000 $7,090 What is the tax treatment of the condominium for Jaron in 2017? 4. On April 6, Jaron sold a parcel of land he had held for investment to a real estate development firm for $75,000. He purchased the land three years earlier from his brother for $70,000. His brother had originally purchased the land for $74,000. What is the amount and character of Jaron's gain or loss on the sale of the land? 5. On May 1, Jaron purchased 1,000 shares in Genomics Ltd. for $10 per share. In December he was forced to sell all 1,000 shares at $8 per share to avoid a conflict of interest. What is the amount and character of Jaron's gain or loss on the sale of the stock?

Explanation / Answer

Rent income -18,000

(-) Statndard deduction 30% -5,400

(-) Interest3,150

Net income9,450

Sale consideration -$ 75,000

Cost of acquisition - $74000

NET LONG TERM CAPITAL GAIN$ 1000

EXEMPT FROM TAX

Cost of acquisition-1000*$ 10 -$ 10,000

Short term capital loss -$ 2000

Taxable at 15%

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