Question

A taxpayer conducts a qualifying like-kind exchange. There is no boot involved in the transaction. The basis of the property received will equal the adjusted basis of the property exchanged.

a. True
b. False

Answer 1

In a qualifying like-kind exchange with no boot involved, the basis of the property received is equal to the adjusted basis of the property exchanged.

Step-by-step explanation:

The statement 'a. True' is correct. In a qualifying like-kind exchange, a taxpayer exchanges a property for another property of like-kind without involving any cash or other non-like-kind property, which is known as boot. In this type of exchange, the basis of the property received is equal to the adjusted basis of the property exchanged.