5. Mary owns an apartment building that has an adjusted basis of $1,080,000 but subject to a mortgage of $320,000. Mary transfers the apartment building to Gary, and receives from Gary $230,000 in cash and an office building with a fair market value of $880,000 at the time of the exchange. Gary assumes the $320,000 mortgage on the apartment. The transfer is a like-kind exchange.

a) what is Marys realized gain/ loss?

b) what is Mary recognized gain/loss?

c) what is Marys basis of the newly acquired office building?

6. Cindy sold her GE stock to her brother Jeff for $1,200. She bought the stocks for $1,500.

a. How much is Cindys deductible loss?

b. later, Jeff sold the stock to the third unrelated party for $1,500. What is Jeffs gain or loss?

c. If Jeff sold the stock to the third unrelated party for $1,000, what is Jeffs gain or loss?

7. Maria, who is single, had the following items for the tax year:

Salary $80,000

Loss on sale of 1244 small business stock acquired 3 years ago (60,000)

Stock acquired 2 years ago became worthless during the year (5,000)

Long-term capital gain 25,000

Nonbusiness bad debt (15,000)

Determine Marias adjusted gross income:.

8. Jose, single, had the following items for the tax year :

Salary $44,000

1244 loss on stock acquired 3 years ago (70,000)

1244 gain on stock acquired 10 months ago 26,000

Worthless security purchased in June of last year (4,000)

Nonbusiness bad debt (7,000)

Interest income 8,000

Compute Joses adjusted gross income:.

9 . In 2015, Harold purchased a classic car that he planned to restore for $12,000. However, Harold is too busy to work on the car and he gives it to his daughter Julia in 2021. At this time, the fair market value of the car has declined to $10,000. Harold paid no gift tax on the transaction. Julia completes some of the restoration herself with out-of-pocket costs of $5,000. She later sells the car for $30,000. What is Julias recognized gain or loss on the sale of the car? What if Julia sold the car for $13000? What if Julia sold it for $16000?