Financial Strategy Assessment

1.Christine died owning an Interest in a passive activity property. The property had an adjusted basis of $219,500, a fair market value of $232,500, and suspended losses of $22,475.
Required:
What can be deducted on her final income tax return?

2.Virginia is an accountant for a global CPA firm. She is being temporarily transferred from the Raleigh, North Carolina, office to Tokyo. She will leave Raleigh on October 7, 2020, and will be out of the country for four years. She sells her personal residence on September 30, 2020, for $193,750 (her adjusted basis is $150,000). Upon her return to the United States in 2024, she purchases a new residence in Los Angeles for $172,500, where she will continue working for the same firm.
Required:
a. What are Virginia's realized and recognized gain or loss? (If there is no gain or loss is recognized, select "No gain/loss".)

b. What is Virginia's basis in the new residence?

3.Darrell acquired an activity eight years ago. The loss from it in the current year was $54.000. The activity involves residential rental real estate in which he is an active participant.
Required:
Calculate Darrell's AGI after considering that Darrell's AGI was $90.000 before including any potential loss.

4.Evelyn has rental income of $44,500 and passive income of $15,250. She also has $133,500 of losses from a real estate rental activity In which she actively participates. Evelyn's AGI is $88,000 before considering this activity.
Required:
How much rental loss can she deduct against other income sources without regard to the at-risk rules??

5.What is the basis of the new property in each of the following situations? What is the recognized gain or loss? Required:

a. Rental house with an adjusted basis of $109,000 exchanged for a personal-use river cottage with an FMV of $139,500.

b. General Motors common stock with an adjusted basis of $23,500 exchanged for Quaker Oats common stock with an FMV of $17.750.

c. Land and building with an adjusted basis of $24,100 used as a furniture repair shop exchanged for land and a building with an FMV of $52.400 used as a car dealership.

d. An office building with an adjusted basis of $22,800 exchanged for a heavy-duty truck with an FMV of $28.200. Both properties are held for 100% business purposes.

e. A residential rental property held for investment with an adjusted basis of $252.400 exchanged for a warehouse to be held for Investment with an FMV of $205,500