The Taylor Corporation acquires a large boring machine in exchange for two of its smaller boring machines.

Question:

The Taylor acquires a large boring machine in exchange for two of its smaller boring machines. The large machine has a fair market value of $108,000. The smaller machines are valued at $92,000, so Taylor pays an additional $16,000 on the exchange.
a. If the basis of the smaller machines is $69,000, what is Taylor's realized and recognized gain or loss on the exchange?
b. What is the deferred gain or loss?
c. What is its basis in the large machine?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...