Question 15 please. Thanks!
14. Nancy paid $160,000 (does not include land value) to have her home built in 1985. This year, she moved into a new home and began renting her old home. Before changing the home to rental use, she paid $20,000 for permanent improvements and claimed a $2,000 casualty loss for damage to the house. The fair market value of her property on the date she changed its use was $180,000, which included $30,000 for the land. What is her depreciable basis for the rental house? $180,000 $150,000 $178,000 d) $182,000 15. Using the information from Question 14 and the following information, if Nancy chooses to sell the rental property five years later, how would she report her gain/loss on the sale of the rental house (not including the land)? $ 275,000 Sale price of house (not including the land): Sale price of land: Purchase price of house: FMV of house at conversion: $ 50,000 $ 160,000 $ 150,000 Depreciation - MACRS $ 24,317 (straight line): Permanent improvements: $20,000 Purchase price of land: $ 20,000 FMV of land at conversion: $ 30,000 a) $149,317 Section 1231 gain b) $24,317 Section 1250 gain; $125,000 ordinary income c) $24,317 Section 1250 gain; $125,000 Section 1231 gain d) $119,317 Section 1250 gain; $30,000 Section 1231 gain 14. Nancy paid $160,000 (does not include land value) to have her home built in 1985. This year, she moved into a new home and began renting her old home. Before changing the home to rental use, she paid $20,000 for permanent improvements and claimed a $2,000 casualty loss for damage to the house. The fair market value of her property on the date she changed its use was $180,000, which included $30,000 for the land. What is her depreciable basis for the rental house? $180,000 $150,000 $178,000 d) $182,000 15. Using the information from Question 14 and the following information, if Nancy chooses to sell the rental property five years later, how would she report her gain/loss on the sale of the rental house (not including the land)? $ 275,000 Sale price of house (not including the land): Sale price of land: Purchase price of house: FMV of house at conversion: $ 50,000 $ 160,000 $ 150,000 Depreciation - MACRS $ 24,317 (straight line): Permanent improvements: $20,000 Purchase price of land: $ 20,000 FMV of land at conversion: $ 30,000 a) $149,317 Section 1231 gain b) $24,317 Section 1250 gain; $125,000 ordinary income c) $24,317 Section 1250 gain; $125,000 Section 1231 gain d) $119,317 Section 1250 gain; $30,000 Section 1231 gain
