I would like everyone to understand the basics of a like-kind exchange (a Section 1031 exchange). Everyone should understand that in an exchange of property, gain is only recognized to the lesser of realized gain or boot received. The more difficult process is determining the basis of the property received, in which there are two ways. The first is as follows: Adjusted basis of property given up + adjusted basis of any boot given + gain recognized + liability assumed by transferor/seller - FMV of boot received - loss recognized - liability assumed by transferee/buyer = adjusted basis in property received The second method is as follows: FMV of property received - deferred gain (realized gain less recognized gain) + any deferred loss = adjusted basis in property received This being said, you should be able to calculate basis using both of these methods (and get the same answer). Here