Gena exchanges land held as an investment with a $60,000 basis for other land with a $80,000 FMV and a motorcycle with a $10,000 FMV. The acquired land is to be held for investment and the motorcycle is for personal use. What is the amount of recognized gain?

Question

Quizplus · Accepted Answer

The recognized gain is the lesser of the realized gain or the boot received. The realized gain is $30,000 ($90,000 total FMV received - $60,000 basis). The boot received is $10,000 (FMV of the motorcycle). Therefore, the recognized gain is $10,000.

Gena Exchanges Land Held as an Investment with a $60,000