Determine the tax basis of tiger and phil assets

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Reference no: EM131396947

Problem -

Tiger energy has the following information:

Leasehold Costs - $6,000

Accumulated Depletion - 1,000

L&WE - 200,000

Accumulated depreciation - 75,000

The lease is subleased to Phil Oil Corporation for $300,000, and Tiger retains an 1/16 ORI. At the date of the sublease, the FMV of the equipment is 180,000.

REQUIRED: Determine the tax basis of Tiger's and Phil's assets and the amount of any tax revenue.

Reference no: EM131396947

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