What is gain or loss, Grayson has an asset used in his

What is gain or loss

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Reference no: EM131330550

Grayson has an asset used in his business. He exchanges it for a like-kind asset owned by Eli. (Grayson and Eli are unrelated). The basis of Grayson's asset is $40,000 and he gives Eli $20,000 cash plus the asset in exchange for Eli's asset, which is worth $36,000. Eli's basis in his original asset is $10,000. What is Eli's gain or loss?

$20,000 gain realized and recognized.

$26,000 gain realized and recognized.

$0 gain recognized.

$0 loss recognized.

Reference no: EM131330550

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