Property Transactions

Question 1

Tax basis in a property

Answer 1

Cost
\+ purchase expenses
\+debt assumed
\+back taxes and int paid
= basis

Question 2

gifted property basis

Answer 2

sold at gain > donors basis
sold at loss> use lesser of FMV or donors basis at time
sold between> no G/L

Question 3

estate property inherited basis

Answer 3

Use FMV at death OR alternate valuation date (6mo later)

inherited prop is LTCG no matter how long had

Question 4

sale of an asset gain calc

Answer 4

sell price (cash+liab)
- adj basis of prop
= gain

Question 5

LKE

Answer 5

real for real or personal for personal business property only
US prop only

Question 6

Involuntary conversion

Answer 6

occurs when you receive money for property involuntarily converted.
no gain if reinvest completely - if not take lesser of realized gain vs. amt not reinvested

Question 7

1231 Property

Answer 7

Real or Personal Business property held more than 1 year

Inventory is NEVER 1231

Question 8

1231 Net Losses

Answer 8

if exceeds gain treat as Ordinary income

Question 9

1231 net gains

Answer 9

if exceeds losses treat as LTCG

Question 10

1245 Dep Recapture

Answer 10

to extent depreciation - treat as ord gain
remainder is 1231 gain which is LTCG
No 1245 losses

Question 11

1250 property

Answer 11

is real estate that is not 1231 prop
Use 1250 for gain only
for losses use 1231

Question 12

1250 S/L dep

Answer 12

do not use 1250 with S/L - entire gain is 1231