Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington'srecognized gain or loss on the exchange?
A)$0.
B)$2,000.
C)$7,000.
D)$9,000.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Arlington's recognized gain is $2,000, which is the amount of the boot (office equipment) received in the exchange. The exchange of like-kind property (land for land) is generally not recognized, but the receipt of boot triggers recognition of gain up to the amount of the boot received.

Arlington LLC Exchanged Land Used in Its Business for Some