Converted Property
Response to the following problem:
In 2007, Parker converted his personal residence to rental property. The FMV of the home at the time of conversion was $85,000, Parker paid $90,000 for the home ten years ago.
a. If Parker sells the property for $100,000 after taking depreciation deductions of $10,000, what is his recognized gain or loss?
b. Same as in Part a. except that Parker sells the property for $70,000.
c. Same as in Part a. except that Parker sells the property for $78,000.