Question

What Is the basis of the new property In each of the following situatlons? What Is the recognized galn or loss? a. Rental house with an adjusted basis of $111,500 exchanged fora personal-use river cottage with an FMV of $142,750. b. General Motors common stock with an adjusted basis of $24,000 exchanged for Quaker Oats common stock with an FMV of $18,000. c. Land and bullding with an adjusted basls of $24,750 used as a furniture repair shop exchanged for land and a building with an FMV of $53,500 used as a car dealership. d. An office bullding with an adjusted basls of $23,000 exchanged for a heavy-duty truck with an FMV of $28,550. Both propertles are held for 100% buslness purposes. e. A residentlal rental property held for Investment with an adjusted basls of $254,950 exchanged for a warehouse to be held for Investment with an FMV of $207,200 (For all requirements, If no galn or loss is recognized, select "No galn/loss".) Basis of the new property a. Recognized gain S 31,250 b. Basis of the new property Basis of the new property C. Basis of the new property d. Basis of the new property

Answer 1

A	Basis of new property	$142,750
	Recognised gain	$31,250
B	Basis of the new property	$18,000
	Recognised loss	($6,000)
C	Basis of the new property	$53,500
	Recognised gain	$28,750
D	Basis of the new property	$28,550
	Recognised gain	$5,550
E	Basis of the new property	$254,950
	Recognised loss	($47,750)

Basis of new property= Adjusted basis of property given up + boot paid - boot received+ gain recognised.

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