Question

Molly exchanges land (adjusted basis of $85,000; fair market value of $78,000) used in her business and common stock held for investment (adjusted basis of $10,000; fair market value of $15,000) for a single parcel of land (fair market value of $93,000) to be used in her business in a like-kind exchange. What is Molly’s basis in the property received?

Answer 1

Question "What is Molly’s realized gain/loss on the land and machine?, What is Molly’s recognized gain/loss on the land and machine? "

Land Machine

Amount Realized $15,000 $78,000

Adjusted Basis ($10,000) ($85,000)

Realized Gain(Loss) $5,000 ($7,000)

Recognized Gain(Loss) $5,000 $0