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Norm is negotiating the sale of a tract of his land to Pat. Use the following classification scheme to classify each of the items contained in the proposed sales contract:     Legend DARN = Decreases amount realized by Norm IARN = Increases amount realized...

Karen makes the following purchases and sales of stock: Transaction Date Number of Shares Company Price perShare Purchase 1 1 2010 300 MDG $ 75 Purchase 6 1 2010 150 GRU 300 Purchase 11 1 2010 60 MDG 70 Sale 12 3 2010 200 MDG 80 Purchase 3 1 2011 120 GRU 375 Sale 8 1...

Irene Andrews is purchasing the assets of a sole proprietorship from Seth. The fair market values of the assets as agreed to by Irene and Seth are as follows: Asset Seth’s Adjusted Basis Fair Market Value Accounts receivable $ –0– $ 10,000 Notes receivable 15,000...

Paula owns stock in Yellow, Inc., which she purchased for $5,000. The stock has a fair market value of $6,000. Because Yellow is experiencing a cash flow problem, it chooses to distribute nontaxable stock rights instead of cash to its shareholders. a. What effect does...

Roberto has received various gifts over the years. He has decided to dispose of the following assets he received as gifts: a. In 1951, he received land worth $32,000. The donor’s adjusted basis was $35,000. Roberto sells the land for $95,000 in 2012. b. In 1956, he...

Mason Gregg’s car was destroyed by a flood. Unfortunately, his insurance had lapsed two days before he incurred the loss. Mason uses his car for both business and personal use. Mason, who is self employed, does not have adequate savings to replace the car and must...

Andy had AGI of $80,000 for 2012. He was injured in a rock climbing accident and paid $5,200 for hospital expenses and $2,800 for doctor bills. Andy also incurred medical expenses of $2,400 for his child, Jodi, who lives with his former wife, Pearl, and is claimed as...

Pablo suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the system, Pablo incurs and pays the following amounts in 2012: Doctor and hospital...

Ramon had AGI of $180,000 in 2012. He contributed stock in Charlton, Inc. (a publicly traded corporation), to the American Heart Association, a qualified charitable organization. The stock was worth $105,000 on the date it was contributed. Ramon had acquired it as an...