During the current year, Daniel James exchanges land used in his business for a new parcel of land. Daniel's basis in the land is $18,000, and the land is subject to a mortgage of $8,000, which is assumed by the other party to the exchange. Daniel receives new land worth $22,000. Calculate Daniel's recognized gain on the exchange and his basis in the new land. Recognized gain $ Basis in the new land $

Individual Income Taxes
43rd Edition
ISBN:9780357109731
Author:Hoffman
Publisher:Hoffman
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 6CPA
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During the current year, Daniel James exchanges land used in his business for a new parcel of land. Daniel's basis in the land is $18,000, and the land is subject to a mortgage of $8,000, which is assumed by the other party to the exchange. Daniel receives new land worth $22,000.

Calculate Daniel's recognized gain on the exchange and his basis in the new land.

Recognized gain $
Basis in the new land $
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