Week 4 Homework

1.Answer questions on the following like-kind exchanges (fill out the blanks)

	Adjusted basis of old asset	Boot given	FMV of new asset	Boot received	Realized Gain/(loss)	Recognized gain	Postponed Gain/(loss)	New basis of received property
a.	17000	0	14000	0
b.	15000	0	29000	0
c.	4000	6000	8000	500
d.	16000	0	28000	0
e.	7000	0	12000	4000

2. John is in the 35% tax rate bracket and has sold the following stocks in 2017:

	Date purchased	Basis	Date Sold	Amount Realized
Stock A	1/23/2013	5,250	7/22/2017	3,500
Stock B	4/10/2017	14,000	9/13/2017	16,500
Stock C	8/23/2014	10,750	10/12/2017	15,300
Stock D	5/19/2014	4,230	10/12/2017	10,400
Stock E	8/20/2017	8,300	11/14/2017	3,500

Please answer the following questions based on the above information:

a) What is Georges net short-term capital gain or loss from these transactions?
b) What is Georges net long-term capital gain or loss from these transactions?
c) What is Georges overall net capital gain or loss from these transactions?
d) What amount of the gain, if any, is subject to the preferential rate for certain capital gain?

3. Mary owns an apartment building that has an adjusted basis of $1,080,000 but subject to a mortgage of $320,000. Mary transfers the apartment building to Gary, and receives from Gary $230,000 in cash and an office building with a fair market value of $880,000 at the time of the exchange. Gary assumes the $320,000 mortgage on the apartment. The transfer is a like-kind exchange.

a) what is Marys realized gain/ loss?

b) what is Mary recognized gain/loss?

c) what is Marys basis of the newly acquired office building?

4. Cindy sold her GE stock to her brother Jeff for $1,200. She bought the stocks for $1,500.

a. How much is Cindys deductible loss?

b. later, Jeff sold the stock to the third unrelated party for $1,500. What is Jeffs gain or loss?

c. If Jeff sold the stock to the third unrelated party for $1,000, what is Jeffs gain or loss?

5. Holly has received various gifts over the years. She has decided to dispose of the following assets she received as gifts (assume for each of the gift transactions that no gift tax paid). Please answer the questions for each alternative scenario.

a. In 1997, she received a land worth $98,000. The donor's adjusted basis was $ 110,000. Holly sells the land for $102,000 in 2017.

Gift property basis:

Hollys gain/loss on the sale:

b. In 2001, she received stock in Gold company worth $28,000. The donor's adjusted basis was $25,000. Holly sells the stock for $35,000 in 2017.

Gift property basis:

Hollys gain/loss on the sale:

c. In 2008, she received stock in Silver Company worth $35,000. The donor's adjusted basis was $38,000. Holly sells the stock for $ 20,000 in 2017.

Gift property basis:

Hollys gain/loss on the sale: