Business, 01.02.2021 20:40 dedrell16

Ed owns investment land with an adjusted basis of $35,000. Polly has offered to purchase the land from Ed for $175,000 for use in a real estate development. The amount offered by Polly is $10,000 in excess of what Ed perceives as the fair market value of the land. Ed would like to dispose of the land to Polly but does not want to incur the tax liability that would result. He identifies an office building with a fair market value of $175,000 that he would like to acquire. Polly purchases the office building and then exchanges the office building for Ed's land. Required:
a. Calculate Ed's realized and recognized gain on the exchange and his basis for the office building
b. Calculate Polly's realized and recognized gain on the exchange and her basis in th eland.
c. How do you determine if somethng is a recognized gain or loss?

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Answer from: AngelyAce

a. Amount realized $175,000

Less: Adjusted basis ($35,000)

Realized gain $140,000

Recognized gain $0

Observation: What Ed believe is that the exchange could qualify as section 0131 postponement treatment

b. Amount realized $175,000

Less: Adjusted basis ($175,000)

Realized gain $0

Recognized gain $ -

Exchange for the land is $175,000

c. One can determine if it is recognized gain if the figure is positive and if the figure turns negative (i.e -$2,000) then, that is recognized loss.

Answer from: Quest

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans.

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.

Answer from: Quest

One stage of the union organizing process involves the legal requirement that at least 30% of the employees in a potential bargaining unit express a desire for union representation by signing union authorization cards.

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Ed owns investment land with an adjusted basis of $35,000. Polly has offered to purchase the land fr...