A Taxpayer exchanges a business equipment, which has an adjusted basis of $15,000, for a new equipment worth $12,000. In addition, the taxpayer receives cash of $7,000. What is the recognized gain or loss and the basis of the new equipment? a. $0 and $15,000 b. $0 and $8,000 c. $4,000 and $12,000 d. $4,000 and $15,000
A Taxpayer exchanges a business equipment, which has an adjusted basis of $15,000, for a new equipment worth $12,000. In addition, the taxpayer receives cash of $7,000. What is the recognized gain or loss and the basis of the new equipment? a. $0 and $15,000 b. $0 and $8,000 c. $4,000 and $12,000 d. $4,000 and $15,000
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
Problem 3DQ
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Transcribed Image Text:A Taxpayer exchanges a business equipment, which has an
adjusted basis of $15,000, for a new equipment worth $12,000. In
addition, the taxpayer receives cash of $7,000. What is the
recognized gain or loss and the basis of the new equipment?
a. $0 and $15,000
b. $0 and $8,000
c. $4,000 and $12,000
d. $4,000 and $15,000
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