Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: Transferred FMV Original Basis Accumulated Depreciation Warehouse $ 452,500 $ 245,000 $ 45,500 Land 99,000 99,000 Mortgage on warehouse 48,750 Cash 20,500 20,500 Assets Received FMV Land $ 523,250 What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows: Transferred FMV Original Basis Accumulated Depreciation Warehouse $ 452,500 $ 245,000 $ 45,500 Land 99,000 99,000 Mortgage on warehouse 48,750 Cash 20,500 20,500 Assets Received FMV Land $ 523,250 What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter7: Property Transactions: Basis, Gain And Loss, And Nontaxable Exchanges
Section: Chapter Questions
Problem 32P
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Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of land. A summary of the exchange is as follows:
| Transferred | FMV | Original Basis | Accumulated |
|---|---|---|---|
| Warehouse | $ 452,500 | $ 245,000 | $ 45,500 |
| Land | 99,000 | 99,000 | |
| Mortgage on warehouse | 48,750 | ||
| Cash | 20,500 | 20,500 |
| Assets Received | FMV |
|---|---|
| Land | $ 523,250 |
What are Prater's realized and recognized gain on the exchange and its basis in the assets it received in the exchange?
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