Elvin, a single taxpayer 45 years of age, sells his residence in 2016. He receiv

Question

Elvin, a single taxpayer 45 years of age, sells his residence in 2016. He receives $35,000 in cash, and the buyer assumes his $100,000 mortgage. Elvin also pays $8,100 in commissions and transfer costs.

If an amount is zero, enter "0". If no taxable gain /loss, select "No taxable gain or loss: from the dropdown.

a. Calculate the amount realized on the sale.
$

Feedback

b. If the residence was acquired in 1986, and its adjusted basis is $75,000, calculate the amount and nature of the taxable gain on the sale (assuming he does not purchase a new residence).

An office machine used by Josie in her accounting business was completely destroyed by fire. The adjusted basis of the machine was $8,000 (original basis of $14,000 less accumulated depreciation of $6,000). The machine was not insured.

Calculate the amount and nature of Josie's gain or loss as a result of this casualty. (Assume this is the taxpayer's only casualty gain or loss.)

Amount of gain or loss:

Explanation / Answer

1)

a)

b)

2) $8,000 is the ordinary loss ( as this is only casualty gain or loss) and also there is no chance for recovery as the machine is not insured.

Amount received in Cash $ 35,000 Mortgage cleared $1,00,000 Total income received $1,35,000 Less: Commissions and transfer costs $ 8,100 Net Amount realized $1,26,900

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.