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27. Tinh exchanges business equipment with an adjusted basis of$55,000(initial basis was $105,000) for business equipment worth$42,000 and $20,000 in cash

a. What is Tinh's realized gain or loss on the oldequipment?

b. How much of the realized gain or loss is recognized on theexchange?

c. What is the character of the recognized gain or loss?

d. What is the basis of Tinh's new business equipment?

31.Fremont Corporations and Dement Corporation exchangeequipment with the following particulars:

Fremont Dement

Fair market value $44,000 $54,000

Adjusted basis $20,000 $60,000

Cash paid $10,000

What are Fremont;s and Dement's realized and recognized gains orlosses on the exchange and the bases in the equipment they acquirein the exchange?

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Jean Keeling
Jean KeelingLv2
23 Sep 2018

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Circle Co. owns equipment 1 (FMV = $50,000, AB = $15,000) that it uses in its business. Circle Co. exchanges equipment 1 for equipment 2 (FMV = $40,000) and stock worth $10,000 in a like - kind exchange.

17. What is Ci rcle Co.’s r ecognized gain or loss on the exchange? Note: you should calculate realized gain/loss first, but the question asks only for recognized gain/loss.

18. What is Circle Co.’s basis in equipment 2?

19. What is Circle Co.’s basis in the stock?

Note: the realized gain that was not recognized in Q17 did not disappear; it is built in to equipment 2 after the exchange (FMV of Equip 2 minus Circle Co.’s basis should equal any realized but not recognized gain from Q17.

29. Joyce exchanges a machine used in her trade or business foranother machine. In addition, she gives 200 shares of AlphaCorporation stock which have a fair market value of $38,000 and abasis of $29,000. The old machine has an adjusted basis of $36,000and the new machine has a fair market value of $100,000. What isthe recognized gain or loss and the basis of the new machine?

a. $26,000 and $74,000.

b. $9,000 and $74,000.

c. $26,000 and $100,000.

d. $9,000 and $100,000.

e. None of the above.

30. In order to qualify for like-kind exchange treatment:

a. The form of the transaction must bean exchange.

b. Both the property transferred and theproperty given must be held for productive use in a trade orbusiness or for investment.

c. The property must be like kind.

d. All of the above.

e. None of the above.

31. In regard to nontaxable exchanges which, if any, of thefollowing is correct?

a. Neitherrealized gains or losses are recognized.

b. Realized gainsare not recognized but realized losses are recognized.

c. Realizedgains and losses are recognized.

d. Realized lossesare not recognized but realized gains are recognized.

e. None of theabove.

32. Taxpayer receives stock as a gift from his nephew. Theadjusted basis of the stock is $15,000 and the fair market value is$37,000. Taxpayer trades the stock for bonds with a fair marketvalue of $35,000 and $2,000 cash. What is his recognized gain andthe basis for the bonds?

a. $2,000,$17,000.

b. $0, $15,000.

c. $2,000,$15,000.

d. $22,000,$35,000.

e. None of theabove.

Jorge contributed land he held as an investment (fair marketvalue $117,000; basis $58,750) and inventory (fair market value$72,500; basis $57,750) to ABC Corporation in exchange for 50percent of the ABC stock (30 shares valued at $114,000) and $75,500cash in a qualifying §351 exchange. (Do not roundintermediate calculations. Round your final answers to the nearestdollar amount.)

a-1. What amount of gain does Jorge recognizeon the exchange?

a-2. What is the character of the gain?

a-3. What would be Jorge's basis in his ABCstock after the exchange?

b. Assume the same facts except that Jorgereceived $75,500 of business property from ABC instead of $75,500cash. What is the amount and character of gain Jorge wouldrecognize on the exchange?

c. Assume the original facts in this exampleexcept that the inventory had an adjusted basis of $83,850 so thatJorge realized a $11,350 loss on the inventory (he still realized a$58,250 gain on the land). How much gain or loss would he recognizeon the exchange?

Please answer all questions and please show work. Thanks somuch.

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