Question
In: Accounting
Russell Corporation sold a parcel of land valued at $517,500. Its basis in the land was...
Russell Corporation sold a parcel of land valued at $517,500. Its basis in the land was $382,950. For the land, Russell received $72,750 in cash in year 0 and a note providing that Russell will receive $265,000 in year 1 and $179,750 in year 2 from the buyer (plus reasonable interest on the note). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
What is Russell’s realized gain on the transaction?
What is Russell’s recognized gain in year 0, year 1, and year 2?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
[The following information applies to the questions displayed below.] Russell Corporation sold a parcel of land...
[The following information applies to the questions displayed
below.] Russell Corporation sold a parcel of land valued at
$517,500. Its basis in the land was $382,950. For the land, Russell
received $72,750 in cash in year 0 and a note providing that
Russell will receive $265,000 in year 1 and $179,750 in year 2 from
the buyer. (Do not round intermediate calculations. Round your
final answers to the nearest whole dollar amount.)
b. What is Russell’s recognized gain in year...
asmine sold land for $250,000 in 2019. The land had a basis of $118,000 and she...
asmine sold land for $250,000 in 2019. The land had a basis of
$118,000 and she incurred selling expenses of $10,000. Jasmine
received $50,000 down in 2019 and will receive five additional
annual payments of $40,000 each. How much income will Jasmine
recognize in 2020 when she receives the first additional payment of
$40,000?
Multiple Choice
$0.
$18,880.
$19,520.
$40,000.
Assume a new partner or shareholder owns land valued at $180,000 in which the tax basis...
Assume a new partner or shareholder owns land valued at $180,000
in which the tax basis is $120,000. How would the “incidence of
taxation” differ for the entities and owners if (1) the owner
(partner or shareholder) sold the property and contributed the
$180,000 proceeds or if (2) the owner (partner or shareholder)
contributed that same property with the entity selling it for
$180,000? What theory of partnership taxation supports this
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On July 1, 2011, Apache Company sold a parcel of undeveloped land to a construction company for $3,000,000. The book value of the land on Apache's books was $1,200,000. Terms of the sale required a down payment of $150,000 and 19 annual payments of $150,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2012. Apache has no significant obligations to perform services after the sale.
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Dorsey Co. has expanded its operations by purchasing a parcel of
land with a building on it from Bibb Co. for $89,000. The appraised
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building is $102,000. information Required:
a. Assuming that the building is to be used in Dorsey Co.’s
business activities, what cost should be recorded for the land? (Do
not round intermediate calculations.)
b. Indicate why, for income tax purposes, management of Dorsey
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On June 1, 2020, Sheffield Corporation approached Silverman Corporation about buying a parcel of undeveloped land....
On June 1, 2020, Sheffield Corporation approached Silverman
Corporation about buying a parcel of undeveloped land. Silverman
was asking $258,000 for the land and Sheffield saw that there was
some flexibility in the asking price. Sheffield did not have enough
money to make a cash offer to Silverman and proposed to give, in
return for the land, a $305,000, five-year promissory note that
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annually to Silverman Corporation...
On June 1, 2017, ABC Corporation approached 123 Corporation about buying a parcel of undeveloped land....
On June 1, 2017, ABC Corporation approached 123 Corporation
about buying a parcel of undeveloped land. 123 Corp was asking
$240,000 for the land and ABC saw that there was some flexibility
in the asking price. ABC did not have enough money to make a cash
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On June 1, 2017, ABC Corporation approached 123 Corporation about buying a parcel of undeveloped land....
On June 1, 2017, ABC Corporation approached 123 Corporation
about buying a parcel of undeveloped land. 123 Corp was asking
$240,000 for the land and ABC saw that there was some flexibility
in the asking price. ABC did not have enough money to make a cash
offer to 123 Corp and proposed to give, in return for the land, a
$300,000, five-year promissory note that bears interest at the rate
of 4%. The interest is to be paid annually to...
A parcel of land is proposed for residential house development. The land is situated beside a...
A parcel of land is proposed for
residential house development. The land is situated beside a river
and so flooding is suspected to occur. Outline how you would go
about assessing if the land is subject to flooding.
If you assess that the land does
flood, outline how you would go about determining the flood levels
at the property. In this case the principal objective of the
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Last year Salvador sold a tract of land (basis of $1 million) to Kate (an unrelated...
Last year Salvador sold a tract of land (basis of $1 million) to
Kate (an unrelated party) for $4 million, with a cash down payment
of $1 million and notes for the balance. The notes carry a 3.5%
rate of interest and mature annually at $1 million each over three
years.
Salvador did not select out of the installment method. Before
any of the notes mature and when they have a fair market value of
$2.8 million, Salvador dies and...
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