Question

Indicate whether the following scenarios result in a recognized gain or loss.

If there is no gain or loss, enter "0".

a. Kay sells her vacation cabin (adjusted basis of $100,000) for $150,000.
There is of $ that is .

b. Adam sells his personal residence (adjusted basis of $150,000) for $100,000.
There is of $ that .

c. Carl's personal residence (adjusted basis of $65,000) is condemned by the city. He receives condemnation proceeds of $55,000.
There is of $ that is .

d. Olga's land is worth $40,000 at the end of the year. She had purchased the land six months earlier for $25,000.
There is of $.

e. Vera's personal vehicle (adjusted basis of $22,000) is stolen. She receives $23,000 from the insurance company and does not plan to replace the automobile.
There is of $ that is .

f. Jerry sells used clothing (adjusted basis of $500) to a thrift store for $50.
There is of $ that .

Answer 1

a. Recognized Gain

Amount realized = $ 150000

Adjusted basis = $ (100000)

Realized Gain = $ 50000

b. Un recognized loss

Amount realized = $ 100000

Adjusted basis = $ (150000)

Realized loss = $ (50000)

c. Un recognized Loss

Amount realized = $ 55000

Adjusted basis = $ (65000)

Realized loss = $ (10000)

d. No loss or gain recognized. (since no sale or disposition is made)

e. Recognized Gain

Amount Realized = $ 23000

Adjusted basis = $ (22000)

Realized Gain = $ 1000

f. Un recognized loss

Amount realized = $ 50

Adjusted basis = $ (500)

Realized loss = $ (450)