Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The answers in the box are not correct. Please help me 4. . Tara owns a house that she has been living in for eight

The answers in the box are not correct. Please help me

4. . Tara owns a house that she has been living in for eight years. She purchased the house for

$200,000 and the FMV today is $ 160,000. She is moving into herfriends house and has decided to convert her residence to rental property. Assume 20% of thepropertys value is allocated to land.

Requirement

a. What is the basis of the house for depreciation? is $ 128,000

b. Requirement b. If she claims depreciation of $12,800 and sells the property six years later for $310,000 (20% allocated toland), determine the gain on the sale of the building and gain on the sale of the land.

c. Requirement c. How much of the gain is due to depreciation?

Amount realized

$248,000

$62,000

Less:

Adjusted basis

(147,200)

(40,000)

Realized gain (loss)

$100,800

$22,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions