Problem NO: 34

69. Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $65,000, and it has claimed

69. Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $65,000, and it has claimed $23,000 of depreciation expense against the building. 

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a. Assuming that Hauswirth receives $50,000 in cash for the warehouse, compute the amount and character of Hauswirth’s recognized gain or loss on the sale.

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b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $50,000, compute Hauswirth’s realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land.

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c. Assuming that Hauswirth receives $20,000 in cash in year 0 and a $50,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth’s gain or loss in year 0 and in year 1.

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