Whipple Corporation exchanges several pieces of office furniture for 10 file cabinets that the Go-Along Corporation no longer needs. Go-Along also gives Whipple a pair of season tickets for the local hockey team. The file cabinets have a value of $2,500 and a basis of $3,000. Go-Along paid the $400 face value for the tickets. The office furniture has a basis of $1,250 and value of $2,900.

a. What are Whipple’s and Go-Along’s realized and recognized gains or losses?

b. What are their deferred gains or losses?

c. What are their bases in the properties acquired?

d. What alternative transaction would you suggest to Whipple?

AppendixLO1