Compute business ks realized loss

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Question - Business K exchanged an old asset (FMV $101,000) for a new asset (FMV $101,000). Business K's tax basis in the old asset was $131,000.

Required -

1. Compute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable transaction.

2. Compute Business K's realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a non-taxable transaction.

3. Six months after the exchange, Business K sold the new asset for $115,000 cash. How much gain or loss does Business K recognize if the exchange was taxable? How much gain or loss if the exchange was non-taxable?

Reference no: EM133179343

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