Facts and information listed below is needed to resolve questions 75 and 77:
On January 1st, Zachary purchased an office building and land (inclusive of acquisition costs) for a total $10,333,000. Zachary and his advisers determined that the land represented 15% of the total purchase price. Subsequent to closing, Zachary hire a third party provider to perform a cost segregation study of the building; as a result, $1,000,000 was reclassified to be personal property having a recovery period of 7 years or less.
75. What would the adjusted tax basis of the building be on December 31st of year 3 (rounded to $1K)?
76. What is the adjusted tax basis of the personal property at the end of year 9 (rounded to $1K)?
77. What would the unrecaptured Section 1250 gain (taxed at the 25% rate) be if the land, building and personal property were sold for 15,333,000 at the end of year 10?
78. What would be the adjusting journal entry to record the payment of a self amortizing qualified nonrecourse senior first mortgage bearing market interest on a loan that is secured by a data center in Boston, MA? Please list the account name (description) and whether it would be an increase or decrease to that account / (a debit or a credit – description – and then increase or decrease).