Elaine exchanges a lot of land that is used exclusively for business purposes for another lot that also is to be used exclusively for business. The adjusted basis for the old lot is $19,750, and its FMV is $15,750.   Required: Calculate Elaine’s recognized gain or loss on the exchange. (If no gain or loss is recognized, select "No gain/loss".) Calculate Elaine’s b

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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Elaine exchanges a lot of land that is used exclusively for business purposes for another lot that also is to be used exclusively for business. The adjusted basis for the old lot is $19,750, and its FMV is $15,750.
 

Required:

  1. Calculate Elaine’s recognized gain or loss on the exchange. (If no gain or loss is recognized, select "No gain/loss".)
  2. Calculate Elaine’s basis for the lot she receives.
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