Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows: Property Surrendered Property Received Adj. Basis FMV Adj. Basis FMV Land $44,000 $60,000 $50,000 $43,000 Cash $ 5,000 $ 5,000 Liability on land $12,000 $12,000 The other party assumes the liability. A. What is Sammy’s recognized gain or loss? Explain your answer. b. What is Sammy’s basis for the assets he received?

Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows: Property Surrendered Property Received Adj. Basis FMV Adj. Basis FMV Land $44,000 $60,000 $50,000 $43,000 Cash $ 5,000 $ 5,000 Liability on land $12,000 $12,000 The other party assumes the liability. A. What is Sammy’s recognized gain or loss? Explain your answer. b. What is Sammy’s basis for the assets he received?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 74P

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Question

Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows:

Property Surrendered Property Received

Adj. Basis FMV Adj. Basis FMV

Land $44,000 $60,000 $50,000 $43,000

Cash $ 5,000 $ 5,000

Liability on land $12,000 $12,000

The other party assumes the liability.

A. What is Sammy’s recognized gain or loss? Explain your answer.

b. What is Sammy’s basis for the assets he received?

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