Question

Problem Materials PROBLEMS 15-26 Like-Kind Exchange. T transferred his farmland (100% business) to V in exchange for a parcel of unimproved urban real estate held by V as an investment. The farm was valued at $400,000 and was subject to a mortgage obligation of $260,000. T's basis in the farm was $340,000. The urban real estate was valued at $450,000 and was subject to a mortgage of $310,000. a. How much gain must T recognize on this exchange? b. What is T's basis in the urban real estate received? 15-27 Like-Kind Exchange. Refer to Problem 15-26. Assume that V had a basis of $360,000 in the urban real estate transferred to T. a. How much gain must V recognize on the exchange? b. What is V's basis in the farm property received? 11 th Ann ..10

Answer 1

15.26

Total value of land = $ 400000

T's basis in land = $340000

% of T's basis = 85%

Total value of urban land = $450000

Consideration of T in urban land = $450000*85% = $382500

1. Gain of T = $382500-$340000=$42500

2. T'basis is 85% that is $382500

15.27

V'basis =@360000

% of basis =(360000/450000)*100 = 80%

Transfereed to T =360000*80% = 268000

Gain of V = 340000-268000= 72000

V's basis is 80%= 268000