Henri likes to invest in land.In a nontaxable exchange,Henri exchanges land having an adjusted basis of $8,500 and a FMV of $10,000,for a another parcel of land having a FMV of $15,000.In addition,Henri paid cash of $5,000.What is Henri's basis in the new land?

Question

Quizplus · Accepted Answer

In this nontaxable exchange, the basis of the new property is the adjusted basis of the old property plus any cash paid. Therefore, Henri's basis in the new land is $8,500 + $5,000 = $13,500.

Henri Likes to Invest in Land