(SOLVED) Firm R owned depreciable real property subject

to a 300 000
Firm R owned depreciable real property subject to a $300,000 nonrecourse mortgage. The
property’s FMV is only $250,000. Consequently, the firm surrendered the property to the
creditor rather than continue to service the mortgage. At date of surrender, Firm R’s adjusted
basis in the property was $195,000. Determine Firm R’s […]

Lyle Company owns commercial real estate with a $360,000 initial cost basis and $285,000
accumulated straight-line depreciation. The real estate is subject to a $120,000 recourse
mortgage and has an appraised FMV of only $100,000. The mortgage holder is threatening to
foreclose on the real estate because Lyle failed to […]

A taxpayer owned 1,000 shares of common stock in Barlo Corporation, which manufactures
automobile parts. The taxpayer’s cost basis in the stock was $82,700. Last week, Barlo
declared bankruptcy and its board of directors issued a news release that Barlo common stock
should be considered worthless. Determine the character of […]

Company B disposed of obsolete computer equipment with a $32,000 initial cost basis and
$27,000 accumulated depreciation. Determine the amount and character of Company B’s
recognized gain or loss if: a. It sold the equipment for $7,000. b. It sold the equipment for
$1,000. c. It dumped the equipment in […]

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Six years ago, Corporation CN purchased a business and capitalized $200,000 of the purchase
price as goodwill. Through this year, CN has deducted $74,000 amortization with respect to this
goodwill. At the end of the year, CN sold the business for $2 million, $250,000 of which was
allocable to goodwill. […]

Firm P, a non-corporate taxpayer, purchased residential realty in 1985 for $1 million. This year it
sold the realty for $450,000. Through date of sale, Firm P deducted $814,000 accelerated
depreciation on the realty. Straight-line depreciation would have been $625,000. a. Determine
the amount and character of Firm P’s recognized […]

Eleven years ago, Lynn Inc. purchased a warehouse for $315,000. This year, the corporation
sold the warehouse to Firm D for $80,000 cash and D’s assumption of a $225,000 mortgage.
Through date of sale, Lynn deducted $92,300 straight-line depreciation on the warehouse. a.
Compute Lynn’s gain recognized on sale of […]

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