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madreJ [45]
3 years ago
7

Patty Leave owned an apartment house for ten years. Depreciation was taken on a straight-line basis. When Patty's adjusted basis

for this property was $200,000, she traded it for an office building having a fair market value of $600,000. The apartment house has 100 dwelling units, while the office building has 40 units rented to business enterprises. The properties are not located in the same city. What is Patty's reportable gain on this exchange
Business
1 answer:
Sav [38]3 years ago
3 0

Answer:

$0

Explanation:

IRS's Section 1031 allows real estate investors to exchange real properties and defer any capital gains tax. In this case, Patty doesn't need to report any gain because she is exchanging her apartment house (with 100 rented apartments) for an office building (with 40 rented offices).

In order for a property to classify as a 1031 exchange, it must involve properties that have similar uses. In this operation, both properties have rental units.

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Alenkinab [10]

Answer:

Total amount available in two years is $1,354,125.

Explanation:

The total amount available in two years can be calculated as follows:

Total amount in the deposit now = Current deposit + Amount planned to be deposited = $650,000 + $200,000 = $850,000

Future value of the total amount the deposit now = Total amount in the deposit now * (1 + Annual interest rate)^Number of years the deposit used = $850,000 + (1 + 15%)^2 = $1,124,125

Future value of next year's deposit = Next year's deposit * (1 + Annual interest rate)^Number of years the deposit used = $200,000 * (1 + 15%)^1 = $230,000

Total amount available in two years = Future value of the total amount the deposit now + Future value of next year's deposit = $1,124,125 + $230,000 = $1,354,125

5 0
3 years ago
Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginni
andrey2020 [161]

Answer:

Predetermined manufacturing overhead rate= $35.65 per machine hour

Explanation:

Giving the following information:

Estimated the machine-hours= 45,900

The estimated variable manufacturing overhead was $7.53 per machine-hour.

The estimated total fixed manufacturing overhead was $1,290,708.

<u>To calculate the predetermined overhead rate, we need to use the following formula:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (1,290,708/45,900) + 7.53

Predetermined manufacturing overhead rate= $35.65 per machine hour

4 0
3 years ago
Unlike merchant wholesalers, ___________ never actually own the goods they help to distribute. rack jobbers retailers cash-and-c
ANEK [815]
The correct answer is agents and brokers. Agents and brokers are considered to be a non-manufacturing traders by which they sell, buy, or even facilitate the traded products of which the goods that they sell are not theirs or they didn't actually owned it.
6 0
3 years ago
Sales Transactions and T Accounts Using T accounts for Cash, Accounts Receivable, Sales Tax Payable, Sales, Sales Returns and Al
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Answer:

Payment id received for merchanise sold on account

4 0
3 years ago
The inventory costing method that reports the earliest costs in ending inventory is:_______
nikdorinn [45]

Answer:

a. LIFO.

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The LIFO method refers to an inventory method that means the item which is last purchased should be sold first during the period of time. So in this inventory method the earliest cost in the closing inventory should be recorded

Therefore the given situation, the correct option is a.

And, the other options are wrong

4 0
3 years ago
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