Prater Inc. enters into an exchange in which it gives up its warehouse on 10 acres of

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Prater Inc. enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows:

What is Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?

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Taxation Of Individuals And Business Entities 2015

ISBN: 9780077862367

6th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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Question Posted: Jan 20, 2017 10:39 AM

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Prater Inc. enters into an exchange in which it gives up its warehouse on 10 acres of

Question:

OriginalAccumulated Transferred Warehouse Land Mortgage on warehouse Cash Assets Received Land FMV Basis Depreciation 300,000 $225,000 $45,000 50,000 30.000 20,000 50,000 20,000 FMV S340,000

Step by Step Answer:

Gain realized is 120000 gain recognized is 10000 and Praters adjusted basis in the la...View the full answer

Taxation Of Individuals And Business Entities 2015

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