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Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land for $35,500. The new land had a fair market value of $38,750. Arlington also received $9,500 of office equipment in the transaction. What is Arlingtons gain or loss recognized on the exchange? Multiple Choice $3,250 SO. $12,750. None of the choices are correct. $9,500.

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Solution: Answer: $9,500 Explanation: Although this exhange qualify for like kind exchange. But gain is recognized on boot received The basis of Arilington inc in new land will be same as carry over cost. Gain will be recognized as lower of Boot or Realized gain.

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