The owner of M&N Milling exchanged a milling machine used in his business for a new one. M&N Milling's basis in the machine was $20,000 and the owner still owes $6,000 related to the purchase of the machine. The other party to the exchange, M. Grinding, assumed the liability along with the machine and transferred a newer and smaller machine worth $30,000 to M&N Milling.
a.Calculate M&N Milling's
1.Realized gain on the exchange.$__________
2.Recognized gain on the exchange.$__________
b.Calculate the adjusted basis of the newer machine.$__________

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The Answer of The owner of M&N Milling exchanged a milling machine used in his business for a new one. M&N Milling's basis in the machine was $20,000 and the owner still owes $6,000 related to the purchase of the machine. The other party to the exchange, M. Grinding, assumed the liability along with the machine and transferred a newer and smaller machine worth $30,000 to M&N Milling.
a.Calculate M&N Milling's
1.Realized gain on the exchange.$__________
2.Recognized gain on the exchange.$__________
b.Calculate the adjusted basis of the newer machine.$__________

The Owner of M&N Milling Exchanged a Milling Machine Used