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    gdelamotte's Avatar
    gdelamotte Posts: 2, Reputation: 1
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    #1

    Sep 5, 2007, 05:07 PM
    Tax purposes
    If a parcel of land that was originally purchased for $85,00 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:
    williamsa9's Avatar
    williamsa9 Posts: 2, Reputation: 1
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    #2

    Jul 7, 2009, 06:32 PM

    If a parcel of land that was originally purchased for $85,00 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at:
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #3

    Jul 7, 2009, 11:20 PM

    If the event meets the recognition criteria, it will be initiallyrecognized as an asset. However, its value will be the fair value of asset surrendered or the fair value of the asset received, whichever is easily determinable. Your question does not mention how the payment of $137,000 was made. If the payment has been made in cash, then the asset will be valued at $137,000 being the fair value of asset surrendered - cash.

    The purchaser's estimate has no relevance, being the purchaser's judgment and, therefore, can not be called a fair value.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #4

    Jul 8, 2009, 10:31 AM

    The land would be recorded on the purchasers books for the amount of the purchase price. Therefore the land would be recorded at $137,000
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