Question
Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows: Property Surrendered Property Received Adj. Basis FMV Adj.
Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows:
Property Surrendered Property Received
Adj. Basis FMV Adj. Basis FMV
Land $44,000 $60,000 $50,000 $43,000
Cash $ 5,000 $ 5,000
Liability on land $12,000 $12,000
The other party assumes the liability.
a. What is Sammy's recognized gain or loss? Explain your answer.
b. What is Sammy's basis for the assets he received?
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Managerial Accounting Tools For Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
5th Canadian Edition
1119403995, 9781119403999
