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Eric Exchanges a Printing Press with an Adjusted Basis of $64,000

Question 49

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Eric exchanges a printing press with an adjusted basis of $64,000 for a smaller model with a $100,000 fair market value.In addition,he receives $20,000 of marketable securities.
a.What is the amount of gain realized by Eric?
b.What is the amount of gain recognized by Eric?
c.What is Eric's basis in the new printing press?
d.What is Eric's basis in the marketable securities?

Correct Answer:

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a.The realized gain is $56,000 [($100,00...

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