• 1.Robert acquired his rental property in November 2005 for $100,000 and sold it in October 2015 for $225,000. The accumulated straight-line depreciation on the property at the time of the sale was $20,000. Robert is in the 35 percent tax bracket for ordinary income.

a.What is Roberts gain on the sale of his rental property?

b. How is the gain taxed? (i.e., What tax bracket is the gain subject to)?

• 2.During 2015, Ethel exchanges a machine for another machine in a like-kind exchange. Ethels adjusted basis in the machine given up is $8,000, and she receives a machine worth $12,000 plus $2,000 cash.

a.	Calculate the amount of gain realized by Ethel on the exchange.
b.	Calculate the amount of the gain that must be recognized by Ethel on the transaction.
c.	Calculate Ethels basis in the new machine.