Solution-Find the amount of gain Taxpayer must recognize

Find the amount of gain Taxpayer must recognize

Reference no: EM132578249

Question - Taxpayer owns beachfront land that he uses in his business. The property's fair value is $175,000, and Taxpayer's basis in the land is $130,000. Taxpayer is approached by a real estate agent representing a client who would like to exchange a parcel of nearby land for Taxpayer's beachfront property. Taxpayer agrees to the exchange, and he receives the nearby land, valued at $160,000, plus $15,000 in cash. Find the amount of gain Taxpayer must recognize on the exchange and his basis in the replacement property.

a) $15,000 gain recognized; $160,000 basis in replacement property

b) $45,000 gain recognized; $130,000 basis in replacement property

c) $15,000 gain recognized; $130,000 basis in replacement property

d) $0 gain recognized; $160,000 basis in replacement property

e) $0 gain recognized; $130,000 basis in replacement property

Reference no: EM132578249

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Find the amount of gain Taxpayer must recognize

Reference no: EM132578249

Reference no: EM132578249

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