1. Renee purchased a tract of land for $300,000 in 2010 when he heard that a new
ID: 2471075 • Letter: 1
Question
1. Renee purchased a tract of land for $300,000 in 2010 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $500,000. Highway engineers surveyed the property and indicated that he would probably get $400,000. The highway project was abandoned in 2015 and the value of the land fell to $200,000. What is the amount of loss Renne can claim in 2015?
a. $0. b. $100,000. c. $200,000. d. $300,000.
2. Angela owned the following lots of Azure Corporation stock. Purchase Date: No. of Shares Basis October 1, 2009 100 $2,500 February 8, 2010 100 $3,500 September 5, 2010 200 $7,000 On October 12, 2015, 200 shares of stock were sold for $12,000. Angela did not specifically identify the shares of stock sold. What is the recognized gain or loss?
a. $0. b. $5,000. c. $5,500. d. $6,000.
Explanation / Answer
Answer.1. a. $0 Neither gain nor loss is recognized by Renee associated with the perceived fluctuations in the value of the land. The requisite identifiable event (i.e., sale or other disposition) has not occurred. Answer.2. 6000 Recognized Gain = 12000 - 2500 - 3500 = $6000
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