Question
Jim Realty LLC, a partnership owned entirely by individuals, sells an apartment building for $39,600,000. The basis of the building immediately prior to the sale
Jim Realty LLC, a partnership owned entirely by individuals, sells an apartment building for $39,600,000. The basis of the building immediately prior to the sale is as follows:
Original Cost - Unadjusted Tax Basis | Accumulated Depreciation | |
Land | 9,000,000 | - |
Building | 25,750,000 | (2,900,000) |
Furniture & Fixtures | 125,000 | (100,000) |
Q1:Using the above information, determine the gain or loss on the sale of the apartment building to the individual owners.
Q2: Assuming that the allocation of the selling price is $9,600,000 to land, $30,000,000 to building and $100,000 to furniture and fixtures, prepare an estimate of the total taxes for the owners on the sale.
Q3: Prepare an alternative calculation for the sale with the total sales price of $72,200,000 that would result in lower taxes for the individuals.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started