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Heygirl1923
24.05.2021 •
Business
In a $1031 like-kind exchange, Rafael exchanges a business building that originally cost $346,800. On the date of the exchange, the building given up has an adjusted basis of $138,720 and a fair market value of $190,740. Rafael pays $28,611 and receives a building with a fair market value of $219,351.
Compute the following.
a. Rafael's realized gain on the exchange is $.
b. Rafael's recognized $1031 gain is $___.
c. Rafael's $1245 depreciation recapture of $___is carried over to the replacement property.
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Ответ:
A. $52,020
B. $0
C. $208,080
Explanation:
a. Computation of Rafael's realized gain on the exchange
Using this formula
Realized gain=Fair market value -Adjusted basis
Let plug in the formula
Realized gain= $190,740-$138,720
Realized gain=$52,020
Therefore a. Rafael's realized gain on the exchange is $52,020
b. Based on the information given Rafael's recognized $1031 gain is $0 reason been that
NO BOOT WAS RECEIVED
c. Computation for Rafael's $1245 depreciation recapture Amount
Using this formula
Depreciation recapture Amount=Equipment originally cost -Adjusted basis
Let plug in the formula
Depreciation recapture=$346,800-$138,720
Depreciation recapture=$208,080
Therefore Rafael's $1245 depreciation recapture of $208,080 is carried over to the replacement property
Ответ: