Lisa sells business property with an adjusted basis of $130,000 to her son, alfred, for the fair market value of $100,000.

a. what is lisa’s realized and recognized gain or loss?

b. what is alfred’s recognized gain or loss if he subsequently sells the property for $138,000? for $80,000?

a.The realized loss of Liza’s is $30000 (it is not recognized loss).

b.1    Alfred recognized gain is $8000 and realized gain is $38000.

b.2    Alfred recognizes loss of $20000.

Explanation:

a.Explanation

The sell of business property to his son at $100000 which has the market value $130000. Since Lisa incurring a loss of $30000 is considered as a realized loss. This loss can not be considered as the recognized loss because section 267 explains that sell or exchange of property between related parties is not considered as recognized.

b.1 Explanation

the recognized gain can be determined by subtracting the previously disallowed loss of $30000 from $38000 gain. However, the realized gain ($38000) can be determined by subtracting $100000 from $138000.  

b.2 Explanation

The recognized loss of $20000 can be calculated by subtracting the $100000 from $ 80000.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

fractionally backed paper money

fiat money

paper money

metallic money