Question

A owns a ranch in Wyoming, which B offers to purchase. A is not willing to...

A owns a ranch in Wyoming, which B offers to purchase. A is not willing to sell the ranch but is willing to exchange the ranch for an apartment complex in Louisiana. The complex is available for sale. B purchases the apartment complex in Louisiana from C and transfers it to A in exchange for A's ranch. The ranch and the complex each have a $1,000,000 fair market value. Which of the following is true?

A) The transaction qualifies as a like-kind exchange for B but not for A.

B) The transaction qualifies as a like-kind exchange for both B and A.

C) The transaction qualifies as a like-kind exchange for A but not for B.

D) The transaction does not qualify as a like-kind exchange for either B or A.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:

Like kind exchange rules: As per like kind exchange rules both parties exchange real estate properties help for buisness, trade or investment purpose and not for personal residences. Under like kind activities assets of a similar nature are transferred to each other without incurring any tax liablility. Both the parties involved in the transaction qualifies for a Like kind exchange. So here A brought property from C and traded it with A for Ranch. Both A and B traded their real estate properties. So this transaction qualifies for a Like kind exchange transaction.

So correct Answer is option B.

B) The transaction qualifies as a like-kind exchange for both B and A.

For any query please ask in comment box, we are happy to help you. Also please don't forget to provide your valuable feedback. Thanks!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A owns all of the stock of T, the only asset of which is acreage that...
A owns all of the stock of T, the only asset of which is acreage that had been used as one of the last surviving drive-in theatres, with an adjusted basis of $80,000 and a fair market value of $150,000. A’s basis in the T stock is $50,000. Y, a publicly held grocery chain, wants to acquire the property for a store site. Y is willing to give either its voting common stock worth $150,000 in exchange for the property...
3. Mary owns an apartment building that has an adjusted basis of $1,080,000 but subject to...
3. Mary owns an apartment building that has an adjusted basis of $1,080,000 but subject to a mortgage of $320,000. Mary transfers the apartment building to Gary, and receives from Gary $230,000 in cash and an office building with a fair market value of $880,000 at the time of the exchange. Gary assumes the $320,000 mortgage on the apartment. The transfer is a like-kind exchange. a) what is Mary’s realized gain/ loss? b) what is Mary’ recognized gain/loss? c) what...
1. Gibbon Corp., a Canadian public corporation, owns equipment for which the following year-end information is...
1. Gibbon Corp., a Canadian public corporation, owns equipment for which the following year-end information is available: Carrying amount (book value) $59,000 Recoverable amount 52,000 Fair value less disposal costs 55,000 Which of the following best describes the proper accounting treatment for Gibbon's equipment? a. It is not impaired and a loss should not be recognized. b. It is impaired and a loss must be recognized, with no reversal possible. c. It is not impaired, but a loss must be...
3. Randall owns all the stock of SilverLane, Inc., a C corporation for which his adjusted...
3. Randall owns all the stock of SilverLane, Inc., a C corporation for which his adjusted basis is $225,000. Randall founded SilverLane 12 years ago. The assets and liabilities of SilverLane are recorded as follows. Assets Basis FMV Cash $ 15,000 $ 15,000 Accounts receivable –0– 25,000 Inventory 30,000 35,000 Machinery and equipment* 70,000 90,000 Land 60,000 150,000 $175,000 $315,000 Liabilities Basis FMV Accounts payable $ 5,000 $ 5,000 Notes payable 10,000 10,000 $15,000 $15,000 ? *Accumulated depreciation of $55,000...
Mr. Smith's business warehouse was demolished by a tornado on August 10, 2018. On November 14,...
Mr. Smith's business warehouse was demolished by a tornado on August 10, 2018. On November 14, 2018, Mr. Smith received $90,000.00 in insurance proceeds covering the damage to the warehouse. Mr. Smith’s basis in the warehouse was $50,000.00. He purchased a new warehouse on February 5, 2019 for $70,000.00. 12. What is the latest date for Mr. Smith to make an election under $1033 and defer recognition of the gain? a.. December 31, 2020 b. November 10, 2009 c. December...
12 .Which one of these assets is the MOST liquid one? Select one: a. Land b....
12 .Which one of these assets is the MOST liquid one? Select one: a. Land b. A corporate bond 13. Justin pays for his groceries using a debit card. Justin is using money as: Select one: a. A medium of arbitration b. A medium of exchange c. A unit of account d. A store of value e. A unit of transaction c. A stock in a small, risky company d. A vehicle 14. Emma, a high school student, lives with...
QUESTION 1 Which one of the following would NOT be necessary for an offer to have...
QUESTION 1 Which one of the following would NOT be necessary for an offer to have legal standing? A. The language must reflect the intent to become a party to a contract. B. All of the conditions under which the offer would be terminated must be identified. C. All the significant terms and/or conditions must be contained in the offer. D. The offer must be effectively communicated to the other party. 3 points    QUESTION 2 Which one of the...
“Unilateral contracts” are those in which only one side gives consideration to the other. True/False Privately...
“Unilateral contracts” are those in which only one side gives consideration to the other. True/False Privately owned businesses generally do not have to respect Constitutional rights of employees, because the Bill of Rights was designed just to protect people from actions of Government – not from actions of private parties like private businesses. True or False 3. True or False  “Chapter 7” bankruptcy petitions (sometimes referred to as “total liquidation”) are always filed voluntarily, by the debtor. The debtor cannot be...
Please answer all 9 questions with explanation. Thank you On May 8, 1984, Hannah Eisenstat graduated...
Please answer all 9 questions with explanation. Thank you On May 8, 1984, Hannah Eisenstat graduated from Louisiana State University. She set to work opening a coffee shop in Baton Rouge called HannaH and found a perfect location in a new development. Using a $50,000 inheritance to finance the venture together with her own sweat equity, she started the business on August 1, 1984 as a sole proprietorship. The shop was profitable in the first year. Hannah found, however, that...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of external and internal analysis, business and corporate strategy, and corporate governance, please discuss the following questions: 1. What is the corporate strategy behind the merger of Xerox and Fujifilm? 2. Why did Xerox agree to the merger? Is this a good deal for Xerox? Discuss the benefits and challenges they face with the merger. 3. Why did Fujifilm agree to the merger? Discuss the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT