Example #1

Flicker, Inc., and Gadwall Corporation exchange equipment in a like-kind exchange. Flicker receives equipment with a fair market value of $75,000 and transfers equipment worth $63,000 (adjusted basis of $45,000) and cash of $12,000. Flicker's realized gain is $18,000 ($75,000 amount realized $45,000 adjusted basis of equipment transferred $12,000 cash), none of which is recognized.

How to calculate boot from the example 1?

Example #2

Assume the same facts as in the preceding example, except that Flicker transfers equipment worth $30,000 (adjusted basis of $36,000) and boot worth $45,000 (adjusted basis of $27,000). Flicker's net gain on this exchange is $12,000 [$75,000 amount realized adjusted basis of $63,000 ($36,000 + $27,000)]. But Flicker is transferring two pieces of property: equipment (like-kind property) with a built-in realized loss of $6,000 ($30,000 fair market value $36,000 adjusted basis) and non-like-kind property (boot) with a built-in realized gain of $18,000 ($45,000 fair market value $27,000 adjusted basis).

In this case, the $6,000 realized loss on the like-kind property is deferred (not recognized) and the $18,000 realized gain on the non-like-kind property is recognized. In other words, the realized loss on the like-kind property cannot be used to offset the realized gain on the boot given up as part of the transaction.

How is it possible to have two adjusted bases from the same company ($36,000 and $27,000)? I am confused here.