Sarah owned land with a FMV of $150,000 (adjusted basis $135,000) which is investment property (a capital asset). Sarah owned a second tract of land, a 1231 asset, with a FMV of $38,000 (adjusted basis $55,000). Both tracts were acquired in 2000 and condemned by the state this year. The state paid an amount equal to FMV. If there are no other transactions involving capital assets or 1231 assets,
what is the amount that Sarah must report on her current year return?
What will be an ideal response?
The $15,000 gain ($150,000 - $135,000) on the condemnation of the land held for investment is treated as a Sec. 1231 gain and the $17,000 ($38,000 - $55,000) loss due to the condemnation of the business land is a Sec. 1231 loss. Since the 1231 losses exceed the 1231 gains, both are treated as ordinary gains and losses.
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Which one of the following adjustments increases net income for the period?
a. Recognition of the amount of supplies used b. Recognition of interest on a note receivable c. Recognition of wages earned, but not paid to employees d. Recognition of rent costs that had been paid to the landlord in advance
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Employers are allowed to:
A. Permanently replace strikers in both interest and rights disputes. B. Permanently replace strikers in interest disputes but not in rights disputes. C. Temporarily replace workers in interest disputes but not in rights disputes. D. Permanently replace strikers in rights disputes but not in interest disputes.
Eagle Properties, a real estate investment and sales firm, presents a form contract to its customer Floyd, who wants to buy a certain quarter acre of land in a proposed housing subdivision that Eagle is marketing. Eagle does not pressure Floyd to sign a contract, but offers its form on a take-it-or-leave basis. If Floyd signs the form, is it enforceable?
What will be an ideal response?