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I have a question regarding like kind exchanges. See the example problem below
Leker exchanged a van that was used exclusively for business and had an adjusted tax basis of $20,000 for a new van. The new van had a fair market value of $10,000, and Leker also received $3,000 in cash. What was Leker’s tax basis in the acquired van? a. $20,000 b. $17,000 c. $13,000 d. $ 7,000
The answer is B, but I thought it was A based on calculations below
Old Basis 20000
+ Gain Recognized (cash received) 3000
– Boot Received (3000)Basis : 20,000
Would the gain recognized technically be zero for this question since the exchange was for a van that is worth less than the basis in the old van?
AUD - 89
BEC - 84
FAR - 89
REG - 90AUD - 89FAR - 89
BEC - 84
REG - 90
YES!
AUD 8/18/16
FAR 11/16
BEC 1/17
REG 2/17
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