Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $362,500; Luke built the building several years ago at a cost of $310,000. Luke had claimed $81,000 of depreciation expense on the building. The fair market value of the land was determined to be $252,000 at the time of the sale; Luke purchased the land many years ago for $194,250. Problem 11-46 Part-a a. What is the amount and character of Luke's recognized gain or loss on the building?

Question

Business

Leon Villegas

22 December, 22:09

Luke sold a building and the land on which the building sits to his wholly owned corporation, Studemont Corp., at fair market value. The fair market value of the building was determined to be $362,500; Luke built the building several years ago at a cost of $310,000. Luke had claimed $81,000 of depreciation expense on the building. The fair market value of the land was determined to be $252,000 at the time of the sale; Luke purchased the land many years ago for $194,250. Problem 11-46 Part-a a. What is the amount and character of Luke's recognized gain or loss on the building?

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Answers (1)

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Kathy Carpenter · Answer 1

The amount and character of Luke's recognized gain or loss on the building is $133,500.

Explanation:

The amount and character of Luke's recognized gain or loss on the building

= ($362,500 - $310,000) + $81,000

= $133,500

Therefore, The amount and character of Luke's recognized gain or loss on the building is $133,500.