Acc Wk7 Hw

10-1

Distinguish between realized gains and losses and recognized gains and losses.

Realized gain or loss is the difference between the amount realized from the sale or other disposition of property and the adjusted basis at the time of sale or disposition. It is the money you actually earn from the sale of an asset.

Recognized Gain or loss is the amount of income or loss from a sale of an asset that is taxable.

10-47

On April 18, 2011, Jane Juniper purchased 30 shares of Bryan Corp. stock for $210 and on September 29, 2011, she purchased 90 additional shares for $900. On november 28, 2011, she sold 48 shares, which could not be specifically identified, for $576 and on December 8, 2011, she sold another 25 shares for $188. What is her recognized gain or loss?

April 18.2011 30 shares = $7.00 per share

September 29, 2011 90 shares = $10.00 per share

November 28, 2011 30 shares = $210.00

18 shares = $180.00

$390.00

$576.00

$(186.00) Gain

December 8, 2011 25 shares = $250.00

$188.00

$62.00 Loss

$(124.00) Total Gain

11-40

Debbie Davis and Elizabeth Engels exchanged like-kind property. Debbie had an adjusted basis of $12,000 in her property (fair market value is $15,000). Elizabeth's property had an adjusted basis of $9,000 and a fair market value of $10,500, and Elizabeth gave Debbie $4,500 in cash. Determine Debbie's and Elizabeth's realized gain or loss, recognized gain or loss, and the basis in their new property.

Debbie Elizabeth

15,000 FMV 10,500 FMV

12,000 AB 9,000 AB

3,000...