The answer in the bod is not correct. Please help me. 4. ....
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The answer in the bod is not correct. Please help me.
4. . Tara owns a house that she has been living in for eight years. She purchased the house for
$200,000 and the FMV today is $ 160,000. She is moving into herfriends house and has decided to convert her residence to rental property. Assume 20% of thepropertys value is allocated to land.
Requirement
a. What is the basis of the house for depreciation? is $ 128,000
b. Requirement b. If she claims depreciation of $12,800 and sells the property six years later for $310,000 (20% allocated toland), determine the gain on the sale of the building and gain on the sale of the land.
House
Land
Amount realized
$248,000
$62,000
Less:
Adjusted basis
(147,200)
(40,000)
Realized gain (loss)
$100,800
$22,000
Requirement c. How much of the gain is due to depreciation?
Answer & Explanation
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