80.2K

Verified Solution

Link Copied!

1. Create an Excel spreadsheet with two tabs labeled Part 1 and Part and use it to answer the questions. 2. Number all questions and show your calculations. 3. Be sure to complete all parts. Part 1: Taxable Gain or Deductible Loss For each of the following situations, calculate the amount of taxable gain or deductible loss that the taxpayer(s) would report in the year of sale on your Excel Spreadsheet. If there is no taxable gain, write 0. 1. Mark is a single taxpayer and purchased his principal residence in March of Year 1 for $185,000. He sold it on December 1 of Year 3 for $160,000. 2. The Johnsons are married filing jointly taxpayers that sold their principal residence on November 30, Year 5 for $600,000. Mr. Johnson had purchased the home by himself on March 1, Year 1 for $140,000 prior to his marriage to Mrs. Johnson on January 1, Year 4 (she moved in on that date). 3. Mimi files as head of the household and purchased her principal residence on March 1, Year 2 for $250,000. She lived in the home for 3 years and sold it for $475,000. During the 3 years, Mimi took a home office deduction with depreciation totaling $3,000. 4. Betsy and Michael file their taxes jointly and sold their home on September 15 of Year 4 for $965,000 because Betsy had a job transfer out-of-town. They had purchased the property together on September 15 of Year 3 for $615,000. Part 2: Like-Kind Exchange Jane Doe and Lisa Marie entered into a qualified exchange of like-kind property. Information about the properties being exchanged is provided below. Answer the following questions on Tab 2 of your Excel Spreadsheet based on the information provided. If the response is zero, enter a 0. Show all calculations. Data: Parcel 1 property transferred from Jane to Lisa: Fair market value of Parcel 1: $300,000 Jane's adjusted basis in Parcel 1: $150,000 Remaining mortgage on Parcel 1 assumed by Lisa: $50,000 Parcel 2 property transferred from Lisa to Jane: Fair market value of Parcel 2: $250,000 Lisa's adjusted basis in Parcel 2: $170,000 Jane Doe and Lisa Marie entered into a qualified exchange of like-kind property. Information about the properties being exchanged is provided below. Answer the following questions on Tab 2 of your Excel Spreadsheet based on the information provided. If the response is zero, enter a 0. Show all calculations. Data: Parcel 1 property transferred from Jane to Lisa: Fair market value of Parcel 1: $300,000 Jane's adjusted basis in Parcel 1: $150,000 Remaining mortgage on Parcel 1 assumed by Lisa: $50,000 Parcel 2 property transferred from Lisa to Jane: Fair market value of Parcel 2: $250,000 Lisa's adjusted basis in Parcel 2: $170,000 Remaining mortgage on Parcel 2 assumed by Jane: $20,000 Additional cash paid by Lisa to Jane to balance the exchange: $30,000 Questions 1. What is the gain realized by Jane on the exchange? 2. What is the gain recognized by Jane on the exchange? 3. What is Jane's basis in the new Parcel 2 received by Lisa? 4. What is the gain realized by Lisa on the exchange? What is the gain recognized by Lisa on the exchange? 5. What is Lisa's basis in the new Parcel 1 received from Jane? 1. Create an Excel spreadsheet with two tabs labeled Part 1 and Part and use it to answer the questions. 2. Number all questions and show your calculations. 3. Be sure to complete all parts. Part 1: Taxable Gain or Deductible Loss For each of the following situations, calculate the amount of taxable gain or deductible loss that the taxpayer(s) would report in the year of sale on your Excel Spreadsheet. If there is no taxable gain, write 0. 1. Mark is a single taxpayer and purchased his principal residence in March of Year 1 for $185,000. He sold it on December 1 of Year 3 for $160,000. 2. The Johnsons are married filing jointly taxpayers that sold their principal residence on November 30, Year 5 for $600,000. Mr. Johnson had purchased the home by himself on March 1, Year 1 for $140,000 prior to his marriage to Mrs. Johnson on January 1, Year 4 (she moved in on that date). 3. Mimi files as head of the household and purchased her principal residence on March 1, Year 2 for $250,000. She lived in the home for 3 years and sold it for $475,000. During the 3 years, Mimi took a home office deduction with depreciation totaling $3,000. 4. Betsy and Michael file their taxes jointly and sold their home on September 15 of Year 4 for $965,000 because Betsy had a job transfer out-of-town. They had purchased the property together on September 15 of Year 3 for $615,000. Part 2: Like-Kind Exchange Jane Doe and Lisa Marie entered into a qualified exchange of like-kind property. Information about the properties being exchanged is provided below. Answer the following questions on Tab 2 of your Excel Spreadsheet based on the information provided. If the response is zero, enter a 0. Show all calculations. Data: Parcel 1 property transferred from Jane to Lisa: Fair market value of Parcel 1: $300,000 Jane's adjusted basis in Parcel 1: $150,000 Remaining mortgage on Parcel 1 assumed by Lisa: $50,000 Parcel 2 property transferred from Lisa to Jane: Fair market value of Parcel 2: $250,000 Lisa's adjusted basis in Parcel 2: $170,000 Jane Doe and Lisa Marie entered into a qualified exchange of like-kind property. Information about the properties being exchanged is provided below. Answer the following questions on Tab 2 of your Excel Spreadsheet based on the information provided. If the response is zero, enter a 0. Show all calculations. Data: Parcel 1 property transferred from Jane to Lisa: Fair market value of Parcel 1: $300,000 Jane's adjusted basis in Parcel 1: $150,000 Remaining mortgage on Parcel 1 assumed by Lisa: $50,000 Parcel 2 property transferred from Lisa to Jane: Fair market value of Parcel 2: $250,000 Lisa's adjusted basis in Parcel 2: $170,000 Remaining mortgage on Parcel 2 assumed by Jane: $20,000 Additional cash paid by Lisa to Jane to balance the exchange: $30,000 Questions 1. What is the gain realized by Jane on the exchange? 2. What is the gain recognized by Jane on the exchange? 3. What is Jane's basis in the new Parcel 2 received by Lisa? 4. What is the gain realized by Lisa on the exchange? What is the gain recognized by Lisa on the exchange? 5. What is Lisa's basis in the new Parcel 1 received from Jane

Answer & Explanation Solved by verified expert

See Answer