Federal Taxation
Week 8
I: 5-34: Basis of Property Received as a Gift – Doug receives a duplex as a gift from his uncle. The uncle’s basis for the duplex and land is $90,000. At the time of the gift, the land and building have FMVs of $40,000 and $80,000 respectively. No gift tax is paid by Doug’s uncle at the time of the gift.
a. To determine gain, what is Doug’s basis for the land?
b. To determine gain, what is Doug’s basis for the building?
c. Will the basis of the land and building be the same as in Parts a & b for purposes ofdetermining a loss?
I: 5-44: Netting Gains and Losses Trisha, whose tax rate is 35%, sells the following capital assets in 2016 with gains and losses as shown:
Assets
Gains or (Loss)
Holding Period
A
$15,000
15 months
B
7,000
20 months
C
(3,000)
14 months
a.Determine Trisha’s increase in tax liability as
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