Taxpayers, a married couple, have two dependent children (ages 5 and 3) and several potentially taxable events that occur during 2019. Husband is a federal government employee who has a $50,000 per year salary. Wife owns and operates through an LLC of which she is the sole member a catering business that generates $155,000 of gross receipts in the year. In doing this problem, assume Taxpayers file a joint return for the year 2019. Further, assume that the rules applicable to the depreciable property, irrespective of the year in which the property is placed in service, are the same as those that apply to depreciable property placed in service in 2019.

Determine Taxpayers Gross Income if, in addition to the amounts above, the following amounts are received during the year:

1. In October, 2010, Husband formed an LLC (of which he has always been the sole member), and on November 1, 2010, Husbands LLC purchased from an unrelated seller a 12-unit mini-storage building for $70,000, $50,000 of which was borrowed through a recourse mortgage that Husband personally guaranteed. The $70,000 cost basis was allocated $50,000 to the building and $20,000 to the land beneath the building. Husbands LLC sold the land and building to an unrelated buyer on June 30, 2019, for $105,000 (which was properly allocated $70,000 to the building and $35,000 to the land). At the closing of the sale, Taxpayers paid off the remaining balance of the mortgage (which was $32,000).