Kornek Inc.transferred an old asset with a $200,000 adjusted tax basis plus $12,000 cash in exchange for a new asset worth $260,000.Which of the following statements is false?
A)If the exchange is taxable,Kornek recognizes a $48,000 gain.
B)If the exchange is nontaxable,Kornek recognizes a $12,000 gain.
C)If the exchange is nontaxable,Kornek's tax basis in the new asset is $212,000.
D)None of the statements is false.

Question

Quizplus · Accepted Answer

In a nontaxable exchange, no gain is recognized, so Kornek would not recognize a $12,000 gain.