In an exchange Archie gave his fully depreciated businessuse

In an exchange, Archie gave his fully depreciated business-use dump truck (FMV $15,000) and $5,000 for a newer business-use dump truck (FMV $20,000). What is the gain realized and recognized on the exchange?

Solution

Cost of Exchange = FMV of fully depreciated business-use dump trucl + Cash

Cost of Exchange = $ 15,000 + $ 5,000

Cost of Exchange = $ 20,000

Gain (Loss) on exchange = FMV of Newer business-Use dump Trucj - Cost of Exchange

Gain (Loss) on exchange = $ 20,000 - $ 20,000

Gain (Loss) on exchange = $ 0

So, There is no Gain or Loss on the Exchagne because the value of the exchange is same.

Answer = Gain (Loss) = $ 0