Homework Sourse1 Answer questions on the following likekind exchanges fill
1. Answer questions on the following like-kind exchanges (fill out the blanks)
Adjusted basis of old asset
Boot given
FMV of new asset
Boot received
Realized
Gain/(loss)
Recognized gain
Postponed
Gain/(loss)
New basis of received property
a.
17000
0
14000
0
b.
15000
0
29000
0
c.
4000
6000
8000
500
d.
16000
0
28000
0
e.
7000
0
12000
4000
| Adjusted basis of old asset | Boot given | FMV of new asset | Boot received | Realized Gain/(loss) | Recognized gain | Postponed Gain/(loss) | New basis of received property | |
| a. | 17000 | 0 | 14000 | 0 | ||||
| b. | 15000 | 0 | 29000 | 0 | ||||
| c. | 4000 | 6000 | 8000 | 500 | ||||
| d. | 16000 | 0 | 28000 | 0 | ||||
| e. | 7000 | 0 | 12000 | 4000 |
Solution
ANSWER:
Adjusted basis of old asset
Boot given
FMV of new asset
Boot received
Realized
Gain/(loss)
Recognized gain
Postponed
Gain/(loss)
New basis of received property
a.
17000
0
14000
0
b.
15000
0
29000
0
c.
4000
6000
8000
500
d.
16000
0
28000
0
e.
7000
0
12000
4000
EXPLANATION:
STEP 1:CALCULATION OF REALIZED GAIN/(LOSS)
realized gain/(loss)=(FMV of new asset+boot recieved)-(adjusted basis of old asset+boot given)
a.(14000+0)-(17000+0)=(3000)
realized loss=3000
b.(29000+0)-(15000+0)=14000
realized gain =14000
c.(8000+500)-(4000+6000)=(1500)
realized loss=1500
d.(28000+0)-(16000+0)=12000
realized gain =12000
e.(12000+4000)-(7000+0)=9000
realized gain =9000
STEP 2:CALCULATION OF RECOGNIZED GAIN
recognized gain=lesser of boot recieved or realized gain
a.0
b.lesser of 0 or 14000
hence 0
c.0
d.lesser of 0 or 12000
hence 0
e lesser of 4000 or 9000
hence 4000
STEP 3:CALCULATION OF POSTPONED GAIN/(LOSS)-
postponed gain/(loss)=relized gain/(loss) -recognized gain/(loss)
a.postponed loss=3000-0
=3000
b.postponed gain=14000-0
=14000
c.postponed loss=1500-0
=1500
d.postponed gain=12000-0
=12000
e.postponed gain=9000-4000
=5000
STEP 4: CALCULATION OF NEW BASIS OF PROPERTY RECIEVED-
new basis of property recieved=FMV-postponed gain or FMV +postponed loss
a.17000+3000=20000
b.15000-14000=1000
c.4000+1500=5500
d.16000-12000=4000
e.7000-5000=2000
| Adjusted basis of old asset | Boot given | FMV of new asset | Boot received | Realized Gain/(loss) | Recognized gain | Postponed Gain/(loss) | New basis of received property | |
| a. | 17000 | 0 | 14000 | 0 | (3000) | 0 | (3000) | 20000 |
| b. | 15000 | 0 | 29000 | 0 | 14000 | 0 | 14000 | 1000 |
| c. | 4000 | 6000 | 8000 | 500 | (1500) | 0 | (1500) | 5500 |
| d. | 16000 | 0 | 28000 | 0 | 12000 | 0 | 12000 | 4000 |
| e. | 7000 | 0 | 12000 | 4000 | 9000 | 4000 | 5000 | 2000 |
