Albert owns 100 acres of land on which he grows spruce trees. His adjusted basis for the land is $100,000. He receives condemnation proceeds of $10,000 when the city's new beltway takes 5 acres along the eastern boundary of his property. He also receives a severance award of $6,000 associated with the possible harmful effects of exhaust fumes on his trees. Albert invests the $16,000 in a growth mutual fund. a. Determine the tax consequences to Albert of the condemnation proceeds. Albert has a $fill in the blank e5276af7ffb2fa3_1 realized gain of which $fill in the blank e5276af7ffb2fa3_3 is recognized. b. Determine the tax consequences to Albert of the severance award. The severance award increases the basis of Albert's remaining property. His adjusted basis for the remaining property is $fill in the blank 304cedff1032fa7_2 .
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Albert owns 100 acres of land on which he grows spruce trees. His adjusted basis for the land is $10...
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