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he purchased a near campus dr 39 approximately $10,000 at the time. Aft value at

ID: 2590500 • Letter: H

Question

he purchased a near campus dr 39 approximately $10,000 at the time. Aft value at the time of the conversion was $160,000 and the the house is er she graduated, he decided to keep the house for use as a rental price of the land had risen to $20.000. The ba o $140,000 o $105,000 o $95,000 O $85,000 Mark for follow up Question 19 of 75. If the Tax Professional does not establish basis for an asset that is sold, the Basis will be adjusted to reflect the fair market value at the time of the sale O Basis will be assumed to be one-half of the sale price. O IRS will assume the basis is $0 and consider all of the proceeds to be gain. 0 IRS will assume the basis to be one-fourth of the sales price. Mark for follow up

Explanation / Answer

19.

In such case there is no basis; therefore, the basis will be considered as $0 by IRS. The whole amount of sale proceeds will be considered as gain and chargeable to tax.

Answer: 3rd option