In downtown Metropolis, Mr. Kent owns several small officebuildings in which he rents space to various professionals. Lastyear he sold two of his rental buildings. Mr. Kent sold one of thebuildings, Lois Lane Office Suites, for $450,000; Mr. Kent’s basisin Lois Lane Office Suites was $400,000. Mr. Kent sold the secondbuilding, Kryptonite Professional Center, for $470,000. Mr. Kent’sbasis in Kryptonite Professional Center was $540,000. He had ownedboth buildings for several years. Depreciation claimed by Mr. Kentwas not accelerated or otherwise subject to any recapturerules.
(a) What is the character of Mr. Kent’s gains and losses? Assumeno other transactions during the year.
(b) What is the result if Mr. Kent’s basis in KryptoniteProfessional Center was $490,000? (all other information remainsthe same as originally stated)
(c) What is the result if Mr. Kent’s basis in Lois Lane OfficeSuites was $490,000? (all other information remains the same asoriginally stated)
(d) What is the result if Lois Lane Office Suites was held for11 months at the time of the sale? (all other information remainsthe same as originally stated)
