Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

10 pts 6 parts to answer. Parts a through f. Label your answers to each part clearly, Richard had the following transactions pertaining to land

image text in transcribed
10 pts 6 parts to answer. Parts a through f. Label your answers to each part clearly, Richard had the following transactions pertaining to land he owns that he rents to a 3rd party: From 1/1 to 6/30, the rental income on Richard's land was $ 40,000. Richard had the tenant pay $ 20,000 to his son Alex, and $ 20,000 to himself On 6/30/20, Richard made gift of this land to his son Alex. Richard purchased this land in 2012 for $ 300,000. The fair market value of this land on 6/30/20 was $ 400,000. From 7/1/ to 12/31, rental income of $ 40,000 was all paid to Alex On 9/1/20, Alex borrowed $ 120,000 from ABC Bank using the land as security on the loan. - Part a (2.5 points). How much rental income will Richard report for tax purposes in 2020? Part b. (.5 points). How much rental income will Alex report in 2020? Part c. (.5 points). How much income will Alex recognize by receiving this land on 6/30/20. Part d. (-5 points). How much income will Alex recognize by borrowing $ 120,000 on 9/1/20? Parte. (2 points). Assume that Alex sells this land on 2/1/21 to Ramon (an unrelated party). As part of the sale Ramon pays Alex $ 300,000 in cash. gives Alex an automobile with a fair market value of $ 60,000. Calculate the gain or loss that Alex will recognize in 2021. Part f. (.5 points). Is this gain or loss short term or long term? 10 pts 6 parts to answer. Parts a through f. Label your answers to each part clearly, Richard had the following transactions pertaining to land he owns that he rents to a 3rd party: From 1/1 to 6/30, the rental income on Richard's land was $ 40,000. Richard had the tenant pay $ 20,000 to his son Alex, and $ 20,000 to himself On 6/30/20, Richard made gift of this land to his son Alex. Richard purchased this land in 2012 for $ 300,000. The fair market value of this land on 6/30/20 was $ 400,000. From 7/1/ to 12/31, rental income of $ 40,000 was all paid to Alex On 9/1/20, Alex borrowed $ 120,000 from ABC Bank using the land as security on the loan. - Part a (2.5 points). How much rental income will Richard report for tax purposes in 2020? Part b. (.5 points). How much rental income will Alex report in 2020? Part c. (.5 points). How much income will Alex recognize by receiving this land on 6/30/20. Part d. (-5 points). How much income will Alex recognize by borrowing $ 120,000 on 9/1/20? Parte. (2 points). Assume that Alex sells this land on 2/1/21 to Ramon (an unrelated party). As part of the sale Ramon pays Alex $ 300,000 in cash. gives Alex an automobile with a fair market value of $ 60,000. Calculate the gain or loss that Alex will recognize in 2021. Part f. (.5 points). Is this gain or loss short term or long term

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

1. What is a rehabilitation theory?

Answered: 1 week ago