Sheila sells land to Elane, her sister, for the fair market value of $40,000. Six months later when the land is worth $45,000, E
1 answer:
Sheila Recognized gain is
Jacob Recognized gain is
<u>Solution: </u>
Sheila’s Sale:
Amount noticed
Fixed basis
-------------
Gain
Recognized Gain =
Jacob’s Sale:
Amount noticed
Fixed basis
-------------
Gain
Recognized Gain = $8000
The $40,000 profit base of Jacob is same as the adjusted basis of Elane.
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