Mitchell, a calendar year taxpayer, is the sole proprietor of a fast-food restaurant. His adjusted basis for the building and the related land is $450,000. On March 12 of the current year, state authorities notify Mitchell that his property is going to be condemned so that the highway can be widened. On June 20, Mitchell's property is officially condemned, and he receives an award of $625,000. Because Mitchell's business was successful in the past, he would like to reopen the restaurant in a new location.
Required:
a. What is the earliest date Mitchell can acquire a new restaurant and qualify for $1033 postponement?
b. On June 30, Mitchell purchases land and a building for $610,000. Assuming that he elects postponement of gain under § 1033, what is his recognized gain?
c. What is Mitchell's adjusted basis for the new land and building?
d. If he does not elect $1033, what are Mitchell's recognized gain and adjusted basis?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Mitchell, a calendar year taxpayer, is the sole proprietor of a fast-food restaurant. His adjusted basis for the building and the related ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
What do you get when you calculate the present value of the free cash flow of the firm using this discount rate?
Answers (1)
What effect will this adjustment have on the accounting records? Unearned Revenue 3,300 Fees earned 3,300 a. Increase net income b. Increase revenues reported for the period c. Decrease liabilities d. All are true.
Answers (1)
Newman Company has both a contingent gain and a contingent loss that it judges to be highly probable to result in future cash flows, which it is able to reasonably estimate.
Answers (1)
Suppose there is a policy debate over whether the United States should impose trade restrictions on imported steel rods: The president of the United States explains that it is necessary to impose trade restrictions, such as a tariff, on the
Answers (1)
Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated on May 1 with terms of 1/15, net 45.
Answers (1)
New Questions in Business
Your brother has asked you for a loan and has promised to pay you $9,800 at the end of three years. If you normally invest to earn 6.
Answers (1)
A retail space was leased for $1,200 per month; the owner also pays the shopping center 8% of gross income which is $50,000 monthly. how much does the owner pay annually?
Answers (1)
Robinson Company had a net deferred tax liability of $34,000 at the beginning of the year, representing a net taxable temporary difference of $100,000 (taxed at 34 percent). During the year, Robinson reported pretax book income of $400,000.
Answers (1)
Your client wants to transfer $500 from their checking account into a savings account to cover tax liabilities for sales made last month. Where should they start the process?
Answers (1)
While working out at the gym you hear a group of individuals making obscene remarks about your body. You feel like you are being sexually harassed. Which of the following is a technique to deal with sexual harassment?
Answers (1)