Determine the Adjusted Basis of the Following Assets

question 96

Essay

Determine the adjusted basis of the following assets.
a.Dennis buys land by paying $45,000 in cash and assuming a loan for $45,000. He incurs legal fees and commissions of $5,000. He pays $3,000 to have tree seedlings planted on the property. A flood causes $6,000 of damage to the property. Dennis does not carry flood insurance, so he deducts the total loss on his tax return. His property tax liability for this year is $750 and his interest on the loan is $1,850.
b.Tyler buys 100 shares of Oliver Corporation stock at $150 per share plus commissions of $300. At the end of the year, Oliver pays a $10 per share cash dividend and informs shareholders that $6 per share is taxable as a dividend and $4 is a nontaxable dividend.
c.Taylor Corporation acquires an asset for $8,000 in its first year of operation. Since the company suffers a loss during this first year of operation, the bookkeeper decides to deduct only half of the depreciation that was allowable on this asset and claims a depreciation deduction of $800, instead of $1,600.

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Definitions:

Equal Opportunity

Equal opportunity is a principle ensuring that all individuals have the same chances to compete for and obtain jobs, education, and other resources, without discrimination based on irrelevant characteristics.

Gender Role Stereotypes

Preconceived ideas and expectations about behaviors, attributes, and roles that society considers appropriate for men and women.

Promotion Decisions

The process of deciding which employees to advance to higher positions within an organization, based on criteria such as performance and potential.

Formal Procedures

Established and officially sanctioned methods and processes used to accomplish tasks or solve problems.