Rosa exchanges business equipment with a $60,000 adjusted basis for a like-kind piece of equipment with a $100,000 FMV and $20,000 of marketable securities.What is Rosa's basis for the new equipment?
A)$60,000
B)$80,000
C)$100,000
D)$120,000

Question

Quizplus · Accepted Answer

A)This transaction qualifies as a like-kind exchange with boot received.$60,000 basis of property exchanged - $20,000 boot received + $20,000 gain recognized = $60,000

Rosa Exchanges Business Equipment with a $60,000 Adjusted Basis for a Like-Kind