Hamid sold land with an adjusted basis of 60000 to his nephe

Hamid sold land with an adjusted basis of $60,000 to his nephew, Yusef, for its fair market value of $50,000. Yusef later sells the land to an unrelated party for $55,000. What is Hamid’s recognized loss upon his sale to Yusef? What is Yusef’s recognized gain or loss upon the subsequent sale? Hamid’s Recognized Loss Yusef’s Recognized Gain or Loss $10,000 $5,000 gain $0 $5,000 loss $10,000 $0 $0 $0

Solution

Hamid sold land costing $ 60,000 at fair market value of $50,000 here the Recognized Loss of hamid is $10,000 Loss because diffrence between actual cost and sale value .

Yusef sold land purchased at $50,000 to out side person at $55,000 here the recognized prifit iss $5,000 because diffrence between actual purchasecost and actual sale value.