Question

Viktor exchanges stock (adjusted basis $19,000, FMV $26,800) and real estate (adjusted basis $19,000, FMV $46,000) held for investment for other real estate to be held for investment. The real estate acquired in the exchange has an FMV of $70,200. What are Viktor’s realized and recognized gain or loss? What is the basis of the acquired real estate?

Answer 1

Answer and Explanation:

Fair Market Value of stock = $26,800

Adjusted Basis = ($19,000)

_________

$7,800 - Gain

There won't be a gain on real estate exchanges as it not recognized.

FMV real estate exchange = $70,200

Deferred Gain on Real Estate =($45,800) - (19,000 + 26,800 = $45,800)

_________

$ 24,400