Question

Teresa’s manufacturing plant is destroyed by fire. The plant has an adjusted basis of $270,000, and...

Teresa’s manufacturing plant is destroyed by fire. The plant has an adjusted basis of $270,000, and Teresa receives insurance proceeds of $410,000 for the loss. Teresa reinvests $420,000 in a replacement plant.

a. Calculate Teresa’s recognized gain if she elects to utilize the involuntary conversion provision. $

b. Calculate Teresa’s basis in the new plant.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Problem 8-21 (Algorithmic) Involuntary Conversions (LO 8.12) Teresa's manufacturing plant is destroyed by fire. The plant...
Problem 8-21 (Algorithmic) Involuntary Conversions (LO 8.12) Teresa's manufacturing plant is destroyed by fire. The plant has an adjusted basis of $281,800, and Teresa receives insurance proceeds of $422,700 for the loss. Teresa reinvests $443,835 in a replacement plant within 2 years of receiving the insurance proceeds. If an amount is zero, enter "0". a. Calculate Teresa's recognized gain if she elects to utilize the involuntary conversion provision. b. Calculate Teresa's basis in the new plant.
Kitty’s factory building, which has an adjusted basis of $475,000, is destroyed by fire on April...
Kitty’s factory building, which has an adjusted basis of $475,000, is destroyed by fire on April 8, 2020. Insurance proceeds of $500,000 are received on June 1, 2020. She has a new factory building constructed for $490,000, which she occupies on October 1, 2020. Assuming Kitty’s objective is to minimize her current-year tax liability, calculate her recognized gain or loss and the basis of the new factory building.
Johnny owned a gas station with adjusted basis of $300000 . After it was destroyed in...
Johnny owned a gas station with adjusted basis of $300000 . After it was destroyed in a fire , he received $560000 from the insurance company .Within the next year, he bought a new gas station for $500000 . what is johnny's recognized gain and what is the basis in the new building?
ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020. On...
ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020. On December 1, 2020 the corporation received an insurance payment of $900,000 for the loss. The corporation’s basis in the warehouse just prior to the loss was $500,000. The corporation would like to use the involuntary conversion rules to defer as much gain as possible. Assume the corporation built a new warehouse on the old site within the required timeframe and incurred construction costs of...
1. ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020....
1. ABC Corporation owned a business warehouse that was destroyed by fire on October 1, 2020. On December 1, 2020 the corporation received an insurance payment of $900,000 for the loss. The corporation’s basis in the warehouse just prior to the loss was $500,000. The corporation would like to use the involuntary conversion rules to defer as much gain as possible. Assume the corporation built a new warehouse on the old site within the required timeframe and incurred construction costs...
Irina's personal-use residence was destroyed in a fire in 2020. The fire was deemed a federally-declared...
Irina's personal-use residence was destroyed in a fire in 2020. The fire was deemed a federally-declared disaster, but it is not a qualified disaster loss. Irina originally purchased the home for $250,000, and she has not made any capital improvements. Before the fire, the house was worth $500,000. After the fire, the house was worth $200,000. Irina received insurance proceeds of $200,000 as a result of the damage to the house. What amount can Irina deduct in 2020 as a...
An office machine used by Josie in her accounting business n as completely destroyed by fire....
An office machine used by Josie in her accounting business n as completely destroyed by fire. The adjusted basis of the machine was $8,000 (origrnai basis of $14,000 less accumulated depreciation of $5,000). The machine was not insured. Calculate the amount and nature of Josie's gain or loss as a result of this casualty.
1. Carl sells his principle residence for $200,000; it has an adjusted basis of $150,000. He...
1. Carl sells his principle residence for $200,000; it has an adjusted basis of $150,000. He incurs selling expenses of $20,000 and legal fees of $2,000. He had purchased another residence one month prior to the sale for $380,000. What is the recognized gain or loss and the basis of the replacement residence if Carl elects to forgo (not use) the §121 exclusion (exclusion of gain on the sale of a principal residence)? 2. Angela exchanges a rental house at...
Sandy owns a building which she uses in her manufacturing business with an adjusted basis of...
Sandy owns a building which she uses in her manufacturing business with an adjusted basis of $375,000 and a $800,000 fair market value. She exchanges her building with a building owned by Mitch. Mitch's building has a $1,050,000 fair market value and is subject to a mortgage of $250,000 which Sandy assumes as part of the transaction. Calculate Sandy's: (1) realized gain, (2) recognized gain, & (3) basis for the building received.
1) Oscar Olson, single, purchased a residence on February 19, 2017, for $170,000. On September 7,...
1) Oscar Olson, single, purchased a residence on February 19, 2017, for $170,000. On September 7, 2019, a tornado completely destroyed his home. The home was insured for its replacement value, and homes in Oscar’s area had appreciated greatly. He received proceeds of $400,000.                a. How much does Oscar exclude and recognize?                b. If Oscar instead had received proceeds of $525,000, how much gain would be excluded and recognized? How much of a replacement residence would have to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT