Answer: See explanation
Explanation:
a. What is Kareem's realized gain or loss?
Amount realized from sale = $330,000
Less: adjusted basis for house and land = $269000
Less: tennis court adjusted basis = $6200
Realized gain = $54700
b. What is the adjusted basis of the rental house and land at the time of the sale?
Original land basis = $50000
Add: Original house basis = $25000
Less: Depreciation = $30900
Adjusted basis = $269100
c. What is the adjusted basis of the tennis court at the time of the sale?
Tennis court original basis = $7500
Less: Depreciation = $1300
Adjusted basis of the tennis court = $6200
d. If the buyer takes the property subject to the $80,000 mortgage, rather than assuming it, what is Kareem's realized gain or loss?
Amount realized = $330000 + $80000 = $410,000
Less: Adjusted basis for house and land = $269100
Less: Adjusted basis of tennis court = $6200
Realized gain = $134700
