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[The following information applies to the questions displayed below.] Kase, an individual, purchased some property in Potomac, Maryland, for $152,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kase’s Maryland property. Kase agrees to the exchange. What is Kase’s realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. The transaction qualifies as a like-kind exchange and the fair market value of each property is $710,000.

      b. The transaction qualifies as a like-kind exchange and the fair market value of each property is $116,000.

Answer 1

Answers PageNo0 Amount realized forom machine = $ 410,000 Amount realized from boot = $0 Total amount realized = Amount realized from machine Amount sualized from boot = $70,000 to = $ 410,000 Adjusted başiş = $152.000, Gaiu realized - Total amount - adiested basis realized = $410,000-$152,000, = $ 558,000 Gain recognized = legger of Amount of realized from boot or Gain realized :

PageNo@ Deterred gain = Gaingiealized - Gain recognized = $558,000 - 0 = $558,000 Adjusted babią of new property - Amount arealized – Deferred inmachine gain = $710,000 - $558,000 = $152,000 Realized gain = $ 558,000 Recognised gain = 80 Adjusted basis of new property = $152,000 Amount realized from machine = $116,000 Amount realized from boot = $0 Total amount realized Amount realized from machine - = $116,000 +$0 : = $116,000 Amount realized from boot

Pageno Adjusted başiş = $ 152000 LOSS Realized = 'Total amount realized - Adjusted başiş = $116,000 - $152,000 = $(36,000) toş şoucognized – Leşken of Amount of realized from boot or Gain realized Deferred loss those sualized - lods fa cognized = -36,000 -0 =-36,000 Adjusted basis in new property Amount realizat from machine Deferred Loss = $116,000 - (- 36,000) = $116,000+ 36,000 = $152,000 Realized 10$=($36,000) ke Cogna dee lo$$ = $o . Adjusted basis in new Poroperty = $152,000