Homework Answers
Answer:
a) Realized gain = $9,000 [($12,000 fair market value of new asset + $4,000 boot received) – $7,000 adjusted basis of old asset].
Recognized gain = $4,000.
Postponed gain = $5,000.
New basis = $7,000 ($12,000 fair market value of new asset – $5,000 postponed gain).
b) Realized loss = $1,000.[($15,000 fair market value of new asset - $2000 boot given) – $14,000 adjusted basis of old asset].
Recognized loss = $0.
Postponed loss = $1,000.
New basis = $16,000 ($15,000 fair market value of new asset -( -$1,000 postponed loss)).
c) Realized loss = $1,500.[($8,000 fair market value of new asset + $500 boot received - $7000 boot given) – $3,000 adjusted basis of old asset].
Recognized loss = $0.
Postponed loss = $1,500.
New basis = $9,500 ($8,000 fair market value of new asset - (-$1,500 postponed loss)).
d) Realized gain = $14,000. [($29,000 fair market value of new asset) – $15,000 adjusted basis of old asset].
Recognized gain = $0.
Postponed Gain = $14,000
New basis = $15,000 ($29,000 fair market value of new asset - $14,000 postponed gain).
e) Realized gain = $2,000. [($11,000 fair market value of new asset + $1,000 Boot received) – $10,000 adjusted basis of old asset].
Recognized gain = $1,000.
Postponed Gain = $1,000
New basis = $10,000 ($11,000 fair market value of new asset - $1,000 postponed gain).
f) Realized loss = $3,000. [($14,000 fair market value of new asset ) – $17,000 adjusted basis of old asset].
Recognized gain = $0.
Postponed loss = $3,000
New basis = $17,000 ($14,000 fair market value of new asset -(-$3,000 postponed loss)).
Thank You.
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