Question

1. For the following like-kind exchange transactions, determine: The amount of realized gain or loss The...

1. For the following like-kind exchange transactions, determine:

The amount of realized gain or loss

The amount of recognized gain or loss

The basis of the land received

Basis of Land Exchanged FMV of Boot Received FMV of Land Received
$225,000 $-0- $500,000
$465,000 $140,000 $550,000
$675,000 $350,000 $700,000
$800,000 $250,000 $600,000
$1,000,000 $125,000 $750,000

Homework Answers

Answer #1

Computation of the amount of realized gain or loss, amount of recognized gain or loss and the basis of the land received :

A

B

C

D = B + C

E = D - A

F = lower of B or E

G = E-F   

H = C - G

Basis of Land
Exchanged

FMV of
Boot Received

FMV of Land
Received

Total amount
realized

Realized gain

Recognized gain/ (loss)

Deferred gain/ (loss)

Basis of the land received

$225,000

$-0-

$500,000

$500,000

$275,000

$-0-

$275,000

$225,000

$465,000

$140,000

$550,000

$690,000

$225,000

$140,000

$85,000

$465,000

$675,000

$350,000

$700,000

$1,050,000

$375,000

$350,000

$25,000

$675,000

$800,000

$250,000

$600,000

$850,000

$50,000

$50,000

$0

$600,000

$1,000,000

$125,000

$750,000

$875,000

Loss realized
= ($125,000)

$0

($125,000)

$875,000

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