Question

a taxpayer exchanges real property in which his basis was $100,000 for like kind property worth $80,000 plus $40000 in cash, what amount of gain is recognized?

Answer 1

Gain
Amount realized	120000	80000+40000
less
Adjusted basis	100000
Gain	20000
to the maximum amount of boot ie 40000
Hence, amount of gain recognized = $20000

Hi mate,

I would be grateful to you if you can provide a thumbs up and write one beautiful comment. It will improve my rating and let me continue my journey here.

In case of doubt, please comment. I will consider myself fortunate if I can help you.

All the best for your bright future.