Question

11. Isaac buys a piece of land as an investment, paying $20,000. Three years later he trades the land to Isadore for a piece of land worth $26,000. Isaac holds the new land as an investment. Does Isaac realize a gain on the swap of the lland, and if so how much gain is realized? 12. Does Isaac recognize a gain on the swap of the land and if so how much is it? 13. What is Isaac's adjusted basis in the new property he receives? What is Isaac's holding period in the new land he receives?

Answer 1

*Whwn nothing specified , as per guideleines can only answwer first one .

11. As Issac bought the piece of land @ 20000 and sold it in exchange with piece of land worth @26000 so he gained $6000( 26000-20000). As land is non depriciable so its value doesnt diminish but the value will increase but in nothing specified about the gain in previous property we assume that the current price of the old property is 20000 , so the gain on swap is $6000.