What is the basis of the new machinery

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Reference no: EM131216870

Blue Corporation exchanges machinery with a basis of 200,000 and a FMV of 250,000 for machinery with a FMV of 175,000 and cash of 75,000.

a. What is Blue’s realized gain or loss?

b. What is Blue’s recognized gain or loss?

c. What is the basis of the new machinery?

d. If the basis of the new machinery is less than the original basis, explain why.

Reference no: EM131216870

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