Adjusted basis and appraised value of land


Nikeya sells land (adjusted basis of $60,000) to her adult son, Shamed, for its appraised value of $50,000. Which of the following statements is correct?

a. Nikeya's recognized loss is $10,000 ($50,000 amount realized - $60,000 adjusted basis).

b. Shamed's adjusted basis for the land is $60,000 ($50,000 cost + $10,000 disallowed loss for Nikeya).

c. If Shamed subsequently sells the land for $58,000, he has no recognized gain or loss.

d. Only a. and b. are correct.

e. a., b., and c. are correct.

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Accounting Basics: Adjusted basis and appraised value of land
Reference No:- TGS066978

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