Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 17, Problem 31P

LO.1, 2 Jenny purchased timber on a 100-acre tract of land in South Dakota in March 2017 for $100,000. On January 1, 2019, the timber had a fair market value of $145,000. Because of careless cutting in November 2019, when the fair market value was $158,000, the wood was sold on January 30, 2020, for $98,000.

  1. a. What gain (loss) was recognized in 2018, 2019, and 2020 if Jenny elected to treat the cutting as a sale?
  2. b. What was the nature of the gains (losses) in part (a)?
  3. c. Does the answer change if the timber was sold in December 2019? Why or why not?
  4. d. If the timber was worth only $58,000 on January 1, 2019, was cut in November when it was worth $33,000, and was sold in December for $59,000, how would the answers to parts (a) and (b) change?
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5.The Jones Corp. purchased an investment property on Jan 1, 2017 for a cost of P220,000. The property had a useful life of 40 years and at Dec 31, 2020 had a fair value of P300,000. On Dec 31, 2021 the property was sold for P290,000 incurring disposal costs of P10,000. Jones uses the cost model to account for investment properties. What is the gain or loss to be recognized in profit or loss for the year ended Dec 31, 2021 regarding the disposal of the property?

Chapter 17 Solutions

Individual Income Taxes

Ch. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQCh. 17 - Prob. 14DQCh. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Prob. 17DQCh. 17 - Prob. 18DQCh. 17 - Prob. 19DQCh. 17 - Prob. 20DQCh. 17 - Prob. 21CECh. 17 - Prob. 22CECh. 17 - LO.3 Renata Corporation purchased equipment in...Ch. 17 - LO.3 Jacob purchased business equipment for 56,000...Ch. 17 - Sissie owns two items of business equipment. Both...Ch. 17 - Prob. 26CECh. 17 - Prob. 27CECh. 17 - LO.4 Enzo is a single taxpayer with the following...Ch. 17 - Prob. 29CECh. 17 - Prob. 30CECh. 17 - LO.1, 2 Jenny purchased timber on a 100-acre tract...Ch. 17 - Prob. 32PCh. 17 - LO.2 A sculpture that Korliss Kane held for...Ch. 17 - Prob. 34PCh. 17 - Prob. 35PCh. 17 - Prob. 36PCh. 17 - Prob. 37PCh. 17 - Prob. 38PCh. 17 - Prob. 39PCh. 17 - Prob. 40PCh. 17 - Prob. 41PCh. 17 - Prob. 43PCh. 17 - Joanne is in the 24% tax bracket and owns...Ch. 17 - Prob. 45PCh. 17 - Prob. 46PCh. 17 - Prob. 47PCh. 17 - Prob. 48PCh. 17 - Prob. 49PCh. 17 - Jasmine owned rental real estate that she sold to...Ch. 17 - Prob. 51PCh. 17 - Prob. 52PCh. 17 - Prob. 53PCh. 17 - Prob. 54PCh. 17 - Jay sold three items of business equipment for a...Ch. 17 - Prob. 1RPCh. 17 - Prob. 2RPCh. 17 - Prob. 3RPCh. 17 - Prob. 4RPCh. 17 - Prob. 1CPACh. 17 - Prob. 2CPACh. 17 - Jerry uses a building for business purposes. The...Ch. 17 - Prob. 4CPACh. 17 - Prob. 5CPACh. 17 - Prob. 6CPACh. 17 - Wally, Inc., sold the following three personal...Ch. 17 - Net Section 1231 losses are: a. Deducted as a...Ch. 17 - Prob. 9CPACh. 17 - Prob. 10CPA
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