Question
RedPIG LLC exchanged an office building used in its business for a rental house. RedPIG originally purchased the building for $80,000 and it had an
RedPIG LLC exchanged an office building used in its business for a rental house. RedPIG originally purchased the building for $80,000 and it had an adjusted basis of $53,000 at the time of the exchange. The rental house had a fair market value of $62,000. RedPIG also received $7,000 of cash in the transaction. What is RedPIG's gain or loss recognized on the exchange? What is RedPIG's basis in the rental house?
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| A. Gain $16,000 $62,000 basis in rental house | |
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| B. Gain $0 Basis in rental house $60,000 |
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| C. Gain $7,000 Basis in rental house $53,000 |
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| D. Gain $0 Basis in rental house $62,000 |
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Auditing and Assurance Services
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
6th edition
978-1259197109, 77632281, 77862341, 1259197107, 9780077632281, 978-0077862343
