Reference no: EM132670834
Problem - Lloyd owns a beach house (four years) and a cabin in the mountains (six years). His adjusted basis is $300,000 in the beach house and $315,000 in the mountain cabin. Lloyd also rents a townhouse in the city where he is employed. During the year, he occupies each of the three residences as follows:
Townhouse 135 days
Beach house 155 days
Mountain cabin 75 days
The beach house is close enough to the city so that he can commute to work during the spring and summer. Although this level of occupancy may vary slightly from year to year, it is representative during the time period that Lloyd has owned the two residences.
Because Lloyd plans to retire in several years, he sells both the beach house and the mountain cabin. The mountain cabin is sold on March 3, 2019, for $540,000 (related selling expenses of $35,000). The beach house is sold on December 10, 2019, for $700,000 (related selling expenses of $42,000).
a. Calculate Lloyd's least allowable recognized gain on the sale of the two residences.
b. Assume instead that both residences satisfy the two-year ownership and use tests as Lloyd's principal residence. Because the mountain cabin is sold first, can Lloyd to apply the § 121 exclusion to the sale of the beach house? Explain.
|
What the amount of depreciation for the third year would be
: Using the sum-of-the-years-digit method, the amount of depreciation for the third year would be? Estimated salvage value $ 12,000
|
|
Advise Cisco of the tax consequences of replacing versus
: Advise Cisco of the tax consequences of replacing versus not replacing the residence. Which do you recommend to him
|
|
Find the transaction to enter the exchanges of two assets
: Find the transaction to enter the exchanges of two assets would result in the recognition of. A printer that cost $600 and has been owned for 2 years
|
|
Determine the adjusted cash balance per books at august
: Determine the adjusted cash balance per books at August 31. At August 31, Lily Company has a cash balance per books of $8,330.
|
|
Calculate Lloyd least allowable recognized gain on the sale
: The mountain cabin is sold on March 3, 2019, for $540,000. Calculate Lloyd's least allowable recognized gain on the sale of the two residences
|
|
Develop presentation addressing aging aircraft
: Research and develop a presentation addressing an aging aircraft of any type still in operation today
|
|
Determine the adjusted cash balance per bank at july
: Determine the adjusted cash balance per bank at July 31. Cash balance per bank $7,490, outstanding checks $712, deposits in transit $1,721
|
|
Formulation and implementation of firm strategy
: Explain Corporate Scenarios and then describe how they can have an effect on the formulation and implementation of a firm's strategy.
|
|
Prepare a memo discussing your approach to the situation
: Write a letter to Nell advising her of the tax consequences and how taxes can be minimized. Prepare a memo discussing your approach to the situation
|