Recognized Gain or Loss Calculation on Building and Land
Luke's Recognized Gain or Loss on the Building
Luke's Recognized Gain or Loss on the Land
The fair market value of the land was determined to be $210,000 at the time of the sale; Luke purchased the land many years ago for $130,000. To calculate the amount and character of Luke’s recognized gain or loss on the land, we would use the following formula: Amount of gain or loss on land = ($210,000 - $130,000) = $80,000 gaina) What is the amount and character of Luke’s recognized gain or loss on the building? b) What is the amount and character of Luke’s recognized gain or loss on the land?
a. The amount and character of Luke’s recognized gain on the building is $170,000 b. The amount and character of Luke’s recognized gain on the land is $80,000