Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later

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Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later when the land is worth $45,000, Elane gives it to Jacob, her son. (No gift tax resulted.) Shortly thereafter, Jacob sells the land for $48,000.

a. Assuming that Sheila's adjusted basis for the land is $24,000, what are Sheila's and Jacob's recognized gain or loss on the sales?

b. Assuming that Sheila's adjusted basis for the land is $60,000, what are Sheila's and Jacob's recognized gain or loss on the sales?

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South Western Federal Taxation Individual Income Taxes 2017

ISBN: 9781305873988

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen

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Question Posted: May 25, 2015 06:23 AM

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Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later

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a Sale by Sheila Amount realized 40000 Adjusted basis 24000 Realized gain 16000 Recognized gain 1600...View the full answer

South Western Federal Taxation Individual Income Taxes 2017

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