Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on the exchange.
Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on 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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Kim Company exchanges assets with Chero Company. Kim Company exchanges equipment with a book value of $25,000 and fair market value of $40,000 for Chero Company’s land with a cost of $7,500 and fair market value of $38,000. Chero Company also paid Kim Company $2,000 in cash. Compute Kim Company’s cost of the land acquired and any gain or loss on the exchange.
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