Sales and Exchanges of Property

1- Alex buys land for use in his business for $60 on January 1, 2010. He pays $2/year for mowing the land. On December 31, 2013, he sells the land to Brian for $100. What is Alex's gain or loss on the sale?

2- Chris buys a building on January 1, 2010 for $3.9 million. The building is subject to straight-line 39 year depreciation. He sells the building on December 31, 2013 for $4 million. What is Chris' gain or loss on the sale?

3- Frank buys land for $60 in 2010. He gives a gift of the land to Gail in 2012. The land was worth $50 at the time of the gift. Gail sells the land to Heath in 2014 for $75. What is Gail's gain or loss on the sale?

4- Larry buys a building in 2005 for $14 million. He pays cash of $1 million and takes out a mortgage for $13 million. From 2005-2012, he claims $8 million of depreciation on the building. In 2013, when the building is worth $5 million, Larry is in default on the mortgage payments and the building is foreclosed on by the bank. What is Larry's gain or loss in 2013?

5- Mike buys land and a piece of machinery on July 1, 2005 for $10 million. He allocates $6 million to the land and $4 million to the machinery. Assume 10 year straight-line depreciation for the machinery. On July 1, 2013, he sells the machinery to Nate for $3 million. Around that same time, the IRS reallocates the purchase price as $5 million to the land and $5 million to the machinery. What is Mike's gain or loss on the sale?

6- Tom buys land for $100 on January 1, 2005 and sells the land to Ursula on July 1, 2010 for $120. Ursula gives a gift of the land to Victor on January 1, 2012 when the land is worth $110. Victor sells the land to Wendy on July 1, 2014 for $105. What is Victor's gain or loss on the sale?

7- Edward buys Apple stock at three different times - 10 shares on January 1, 2010 for $300 total, 20 shares on July 1, 2012 for $900 total, and 10 shares on January 1, 2013 for $600 total. He sells 15 shares on July 1, 2014 for $1,800. He is able to separately identify all of his shares. He wants to pay the least amount of tax on his 2014 return. What gain should he report?