29 Poloki Corp sold parcel of land valued at $300,000. Its basis in the land was

Question

29 Poloki Corp sold parcel of land valued at $300,000. Its basis in the land was $250,000. For the land. Peloki received $150, 000 in cash in the current year and a note providing Peloki with $150, 000 in the subsequent year. subsequent year, respectively? What is Peloki's recognized gain in the current and A. $o, $50, 000. B. $10, 000, $40, 000. C. $25, 000, $25, 000. D. $50, 000, $0. E. None of the above 30. Leroy sells a piece of real estate for $100,000 that he purchased several years ago for $40,000. The buyer also assumes a mortgage on the land of $15,000 a) What is Leroy's amount realized? b) What gain or loss if any does Leroy realize? c) What gain or loss if any does Leroy recognize?

Explanation / Answer

29 c $25,000 , $25,000

The gain recognized in each year is calculated as follows:

The gross profit percentage is multiplied by the amount realized each year. The gain $50,000 realized is the $300,000 amount ($150,000 cash plus $150,000 note) less $250,000 adjusted basis. So the $150,000 proceeds(cash) is multiplied by the 16.67% gross profit percentage to determine the $25,000 gain recognized and the same amount of profit recognized in next year when $150,000 received against note.

30.

a) amount realized $100,000

b) Gain $60,000 ($100,000 - $40,000)

c) Amount Realized $100,000 Given

Adjusted Basis 25,000 ( $40,000 original basis - $15,000 mortgage on land)

Gain /(Loss) Realized $75,000)

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.