ACCT 2001 Lecture Notes - Lecture 8: Gross Profit, Natural Disaster, Deferral
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ACCT 2001 Full Course Notes
Verified Note
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Document Summary
Chapter 11: chapter 11 goal: determine the tax consequences of property dispositions (i. e. , property sales, exchanges, or other dispositions) Amount realized (ar) = cash received + fmv of other property + buyer"s. Adjusted basis (ab) = assumptions of liabilities seller"s expenses. Balon bought land 5 years ago for ,000 cash, ,000 loan, ,000 legal fees, and in commissions. On 7/1 he sells the land to arya. Arya gives him stock worth ,000 and assumes balon"s debt of ,000. Arya also agrees to pay the full year"s real estate taxes of ,000. Balon pays in legal fees and a ,000 commission with the sale. Arya pays in legal fees and a commission related to the sale of the land. Arya"s basis in the stock exchanged was ,000. Ordinary losses: ordinary gains ordinary rates, ordinary losses deduct against other ordinary income.
