1. In a like-kind exchange, Tom exchanged with Jerry a piece of equipment with a fair market value of $8,000 an also received a boot of $4,000 from Jerry.

Tom had purchased the equipment for $30,000 and there was an accumulated depreciation of $25,000 at the date of the like-kind exchange.

1. What is Jerrys Fair market value of the equipment exchanged?

2. What is Toms gain realized?

c-What is Toms gain recognized?

3. What is the nature of the gain recognized? Ordinary? Capital Gain? Section 1231 gain?
4. Why?

2. Can a corporation exchange a developed realty for a non-developed realty?

1. Yes? Or No?

3. Why?