Part 4. Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother, Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl recognize with respect to the sale by Carl two months after the transaction with Bob?
a. No gain or loss was recognized.
b. $11,000 gain was recognized.
c. $12,000 gain was recognized.
d. None of the above.
Letter Answer: ____
Explanation:
Part 5. Assume the same facts as in Part 4, except that Carl sold the duplex to the business associate more than two years after the exchange with Bob. Without taking into consideration any changes to the adjusted basis of the property subsequent to the exchange with Bob (such as for depreciation), how much, if any, gain or loss did Bob recognize with respect to the exchange with Carl?
a. No gain or loss was recognized.
b. $11,000 gain was recognized.
c. $214,000 gain was recognized.
d. The transfer by Bob to Carl is a gift.
e. $21,000.
Letter Answer: ____
Explanation:
Part 6. Under the facts of Part 5, what is Bob's basis in the triplex?
a. $86,000.
b. $279,000.
c. $300,000.
d. $312,000.
Letter Answer: ____
Explanation:
Part 7. Assume the same facts as in part 6, except that Carl sold the duplex to his business associate more than two years after the exchange with Bob. Without taking into consideration any changes to the adjusted basis of the property subsequent to the exchange with Bob (such as for depreciation), how much, if any, is Carl's recognized gain with respect to these transactions?
a. No gain or loss on the exchange with Bob, and $12,000 gain on the subsequent sale.
b. $11,000 gain on the exchange with Bob, and $12,000 gain on the subsequent sale.
c. $12,000 gain on the exchange with Bob, and $279,000 on the subsequent sale.
d. None of the above.
Letter Answer: ____
Explanation: