Question

On September 18, 2019, Gerald received land and a building from Frank as a gift. No gift tax was paid on the transfer. Frank’s records show the following. Asset Adjusted Basis FMV Land $100,000 $212,000 Building 80,000 100,000 Do not round any division. Round your final answer to the nearest dollar. a. Determine Gerald's adjusted basis for the land and building. Gerald's adjusted basis for the land is $. Gerald's adjusted basis for the building is $. b. Assume instead that the fair market value of the land was $87,000 and that of the building was $65,000. Determine Gerald's adjusted basis for the land and building. Gerald's basis for gain: Gerald's adjusted basis for the land is $. Gerald's adjusted basis for the building is $. Gerald's basis for loss: Gerald's adjusted basis for the land is $. Gerald's adjusted basis for the building is $.

Answer 1

Step-by-step explanation:

a. The computation of the adjusted basis for the land and building is shown below:

For land = $100,000

For building = $80,000

b. Gerald's basis for gain:

Gerald's adjusted basis for the land is $100,000

Gerald's adjusted basis for the building is $80,000

Gerald's basis for loss:

Gerald's adjusted basis for the land is $87,000 (fair value)

Gerald's adjusted basis for the building is $65,000 (fair value)

Since all the values are given in the question we simply put them in the correct items