Author Question: Josh purchases a personal residence for $278,000 but subsequently converts the property to rental ... (Read 32 times)

Coya19@aol.com · **on:** Sep 13, 2020

Question 1

Jessica owned 200 shares of OK Corporation with a basis of $12,000 and a FMV of $24,000. Jessica received 20 stock rights as a nontaxable distribution with a total FMV of $8,000. Jessica sold the stock rights for $4,000. Jessica's gain or loss on the sale was
◦ $1,000.
◦ $3,000.
◦ $4,000.
◦ ($4,000).

Question 2

Josh purchases a personal residence for $278,000 but subsequently converts the property to rental property when its FMV is $275,000. Assume depreciation of $65,000 has been deducted after conversion to rental use. If Josh sells the property for $280,000, his gain or loss will be
◦ $2,000 gain.
◦ $5,000 gain.
◦ $67,000 gain.
◦ $70,000 gain.

katheyjon · **Reply #1 on:** Sep 13, 2020

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