Enrolled Agent Exam Study Group
Team up with fellow candidates and conquer the Enrolled Agent Exam.
The question did nor indicate if the outdoor porch is detached from the house, if the porch is a constitutes improvement to the main home, why is that not part of the house, and an addition to property value? Why is it being treated as a separate asset?
In this exam question, the partners exchanged like-kind business real property, and paid, but were not reimbursed by the prior owner, for unpaid real estate taxes. The correct answer capitalizes the taxes along with the basis of the building. Is this incorrect? I read on one of the practice questions that real estate taxes cannot be capitalized, they need to be expensed. Which is correct?
"His current adjusted basis in the partnership is $50,000, which includes his share of partnership liabilities of $10,000." If the above INCLUDES his share of partnership liabilities of $10,000,( (total basis of $50,000 =initial investment of $40,000 + $10,000 partnership liabilities), then why is the answer adding another $10,000?