Question

Question 15 of 75 Which of the following situations involving an exchange of business property does NOT exemplify a fully nontaxable exchange? ODavid traded his delivery van with Marcia for a delivery van that had more space and less mileage. He also paid her $2,000 in cash. Miranda traded a commercial building plus $50,000 for Patricia's commercial building. Harold traded an improved lot for Oliver's rental house. Oliver paid the $2,000 expense incurred with the exchange.

Answer 1

Solution: David traded his delivery van with Marcia for a delivery van that had more space and less mileage. He also paid $2,000 in cash

Explanation: It is partially non-taxable exchange because money is paid in addition to like property. A partially non-taxable exchange arises when in an exchange you receive money in addition to like property or unlike property.