Question

# Metro Corp. traded Land A for Land B. Metro originally purchased Land A for \$50,000 and...

Metro Corp. traded Land A for Land B. Metro originally purchased Land A for \$50,000 and Land A’s adjusted basis was \$25,000 at the time of the exchange.

What is Metro’s realized gain or loss, recognized gain or loss, and adjusted basis in Land B in each of the following alternative scenarios?

Problem 11-60 Part-c

c. The fair market value of Land A is \$35,000 and Land B is valued at \$40,000. Metro exchanges Land A and \$5,000 cash for Land B. Land A and Land B are like-kind property.

(1) Amount realized from Land B:

(2) Amount realized from boot (cash):

(3) Total amount realized:

(4) Adjusted Basis:

(5) Gain/Loss Realized:

(6) Gain/Loss Recognized:

(7) Deferred Gain:

Adjusted Basis for Land B:

#### Homework Answers

Answer #1

Ans- The realised gain is \$10,000 and the recognised gain is \$0. Metro's basisin Machine B is \$30,000. Adjusted Basis for Land B is calculated as below:-

 Description Amount Explanation (1) Amount realized from Land B \$40,000 Given in example (2) Amount realized from boot (cash) \$0 Given in example (3) Total amount realized \$40,000 (1)+(2) (4) Adjusted Basis \$30,000 \$25,000+\$5,000 cash (5) Gain realized \$10,000 (3)-(4) (6) Gain recognized \$0 Lesser of (2) or (5) (7) Deferred gain \$10,000 (5)-(6) Adjusted basis in new property \$30,000 (1)-(7)
Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
##### Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT