Question

CC Company exchanged a depreciable asset with a $20,500 initial cost and a $10,700 adjusted basis for a new asset priced at $19,500.

Assuming that the assets do not qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

Assuming that the assets qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

omplete this question by entering your answers in the tabs below.

• Required A
• Required B

Assuming that the assets do not qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

A
Capital gainselected answer incorrect	$8,800selected answer correct
Basis	$8,800selected answer incorrect

• Assuming that the assets qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

  B
  Capital gain selected answer incorrect	$8,800selected answer incorrect
  Basis	$8,800selected answer incorrect

Answer 1

Answer -

Assuming that the assets do not qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

	A Capital gainselected $8,800 ($19500 - $10,700) Basis $19,500

• Assuming that the assets qualify as like-kind property, compute the amount and character of CC’s recognized gain and its basis in the new asset.

Like-kind properties are real estate assets of a similar nature that can be exchanged without incurring any tax liability

As the asset is like kind property no capital gain

• B Capital gain $0 Basis $10,700

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