Kase, an individual, purchased some property in Potomac, Maryland, for $165,000 approximately 10 years ago. Kase...

Kase, an individual, purchased some property in Potomac, Maryland, for $165,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase’s Maryland property. Kase agrees to the exchange.

What is Kase’s realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. The transaction qualifies as a like-kind exchange and the fair market value of each property is $830,000.

Realized Gain
Recognized Gain
Adjusted basis in new property

b. The transaction qualifies as a like-kind exchange and the fair market value of each property is $151,000.

Realized loss
Recognized loss
Adjusted basis in new property

Expert Solution

ekkarill92 answered 2 years ago

Three years ago, ABC Company purchased some five year MACRS property for $74,000. Today it is...

Three years ago, ABC Company purchased some five year MACRS property for $74,000. Today it is selling it for $28,500. How much tax will the company owe on this sale if the tax rate is 21 percent? The MACRS percentages are as follows, commencing with Year 1: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent. A. -$3,431.17 B. -$6,389.44 C. $0.00 D. $1,509.48 E. $2,965.50

Six years ago, an investor bought a property for $2.5 million with 10% down and a...

Six years ago, an investor bought a property for $2.5 million with 10% down and a 20 year mortgage with an interest rate of 5.6% a year. What were the monthly payments? 5 points Today the company sold the property and had an annual return of 10% on their investment. What was the price of the property when it was sold? 5 points How much equity was in the property when it was sold? 5 points If the company had...

Jean and Jude own a townhome that was purchased for $165,000 on 6/30/2007. Current property values...

Jean and Jude own a townhome that was purchased for $165,000 on 6/30/2007. Current property values in the area have not substantially recovered to their pre-2008 values. They believe that their current mortgage balance exceeds the townhome's current market value by $30,000. Their family has grown from 2 to 4 (twins, boy and girl) and as a result they need more living space. The children will be starting school within the next 6 months. They are not pleased with the...

You purchased a property three years ago for $150,000. At the time, you put ten percent...

You purchased a property three years ago for $150,000. At the time, you put ten percent down and received a mortgage for ninety percent of the purchase price. Over the last three years, the value of the property has increased at an annual rate of three percent.a) Approximately how much is the property worth today? b) Ignore the increase in home equity over the last three years due to the amortization of the mortgage. What has been the overall increase...

Echo Company purchased a machine some years ago. At the end of the current year, the...

Echo Company purchased a machine some years ago. At the end of the current year, the company revalued the machine to its fair value. The machine has the following characteristics as at the end of the current year: Original cost $1,000,000 Residual value $ 200,000 Estimated useful life (from acquisition date) 10 years Years of use up to end of current year 4 years Estimated useful life remaining (after current year-end) 6 years Fair value at end of current year...

A person purchased a $219 comma 867 home 10 years ago by paying 10% down and...

A person purchased a $219 comma 867 home 10 years ago by paying 10% down and signing a 30-year mortgage at 8.7% compounded monthly. Interest rates have dropped and the owner wants to refinance the unpaid balance by signing a new 15-year mortgage at 5.4 % compounded monthly. How much interest will refinancing save? Money Saved: $ nothing (Round to the nearest cent as needed.) NOTE: PLEASE WRITE NEATLY AND LABEL THE ANSWERS!!!! EXP: How much interest will financing save?...

Hunter's Lodge purchased $612,000 of equipment four years ago. The equipment is seven-year MACRS property. The...

Hunter's Lodge purchased $612,000 of equipment four years ago. The equipment is seven-year MACRS property. The firm is selling this equipment today for $174,500. What is the aftertax cash flow from this sale if the tax rate is 34 percent? The MACRS allowance percentages are as follows, commencing with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. WHICH answer is correct? $187,407.35 $180,174.19 $198,410.18 $168,825.81 $176,610.81

Brownie, LLC (“Brownie”) purchased property (land and a building) three years ago for $1.5 Million. Annual...

Brownie, LLC (“Brownie”) purchased property (land and a building) three years ago for $1.5 Million. Annual property tax is $25,000 and will not change in the foreseeable future. The property is currently rented for a net after-tax cash flow (inclusive of the aforesaid annual property tax) of $150,000 per year. Brownie is considering converting the property to a fitness center, and has estimated, the net aftertax cash flow of the fitness center will be $250,000 for the next five years....

ABC Company purchased $94118 of equipment 4 years ago. The equipment is 7-year MACRS property. The...

ABC Company purchased $94118 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $5129. What is the After-tax Salvage Value if the tax rate is 15%? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your...

ABC Company purchased $50484 of equipment 5 years ago. The equipment is 7-year MACRS property. The...

ABC Company purchased $50484 of equipment 5 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $8128. What is the After-tax Salvage Value if the tax rate is 35 percent? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if...

Question