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Topic
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Becker Questions –
CPA fanatics, Inc. Enters into an exchange transaction with funny lawyers, Inc. CPA fanatics exchanges a building it has used to run one of its retail locations for land that will be used for the development of a “numbers themed” amusement park. The building given up by CPA fanatics has a FMV of $350,000, original purchase price of $300,000 and depreciation of $80,000. The land received by CPA fanatics has a basis and FMV of 280,000. CPA fanatics also receives $70,000 cash from funny lawyers in the exchange.
FYI, this is a Like-kind exchange simulation….
Question #4: What is the total basis in the property received by CPA Fanatics?
Becker Answer: $290,000
My Answer: $220,000 (280,000 FMV of acquired land – 60,000 deferred gain).
Can anyone explain how the Becker answer is $290,000? What am I doing wrong here?
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