Daniella exchanges business land with a $100,000 adjusted basis for $10,000 cash and business land with a $96,000 FMV. What is the amount of gain recognized on the exchange?

Question

Quizplus · Accepted Answer

Daniella receives $10,000 cash (boot) in the exchange. The gain recognized is the lesser of the realized gain ($6,000) or the boot received ($10,000). Therefore, the recognized gain is $6,000.

Daniella Exchanges Business Land with a $100,000 Adjusted Basis for $10,000