On February 1, Karin purchases real estate for $375,000. The annual property taxes of $5,040 are payable on December 31. Realizing that she will pay the property taxes for the entire year, Karin remits $374,580 to the seller at closing. Karins adjusted basis for the real estate is:

a. $374,580

b.

$375,000

c.

$375,420

d.

$379,620

Nat is a salesman for a real estate developer. His employer permits him to purchase a lot for $75,000. The employers adjusted basis for the lot is $45,000, and its normal selling price is $90,000.

What is Nats recognized gain and his basis for the lot?

a. gain $0; basis $75,000

b. gain $0; basis $90,000

c. gain $15,000; basis $75,000

d. gain $15,000; basis $90,000

In 2014, 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 2018. 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?

a. $0

b. $13,000

c. $15,000

d. $18,000

Kelly inherits land which had a basis to the decedent of $95,000 and a fair market value of $50,000 on August 4, 2018, the date of the decedents death. The executor distributes the land to Kelly on November 12, 2018, at which time the fair market value is $49,000. The fair market value on February 4, 2019, is $45,000. In filing the estate tax return, the executor elects the alternate valuation date. Kelly sells the land on June 10, 2019, for $48,000. What is her recognized gain or loss?

a. ($1,000)

b. ($2,000)

c. ($47,000)

d. $1,000