Homework Answers
Part A
|
Ordinary gain |
$12400 |
|
Basis |
$24000 |
Recognized gain = amount realized – adjusted basis = 24000-11600 = $12400 (it is recaptured as ordinary income)
New basis = amount realized = $24000
Part B
|
Recognized gain |
$0 |
|
Basis |
$24000 |
In like-kind property, no gain is recognized
New basis = adjusted basis = $11600
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