Chapter 8, Problem 20MCQ

To determine

Introduction:When exchange of property takes place between taxpayers, the gain or loss on such exchange is deferred for tax purposes. Under some situations for exchange of real property, the transactions may be non-taxable. To qualify for such non-taxability the property must be sued in a trade or business or for investment.

To choose:The correctbasis in equipment received by S assuming basis in the equipment given up was $12,000.