As part of a plan of reorganization, S received the following assets in exchange for a share of stock with a $75 basis: One share of stock worth $\quad \$ 50$
Cash $\quad \$ 20$ What is S's recognized gain or loss on this exchange?

Question

As part of a plan of reorganization, S received the following assets in exchange for a share of stock with a $75 basis: One share of stock worth $\quad \$ 50$
 Cash $\quad \$ 20$ What is S's recognized gain or loss on this exchange?

Quizplus · Accepted Answer

In this exchange, S is essentially swapping one form of investment (a share of stock) for another (a different share of stock plus cash), which is considered a like-kind exchange under many tax jurisdictions. Generally, in like-kind exchanges, no gain or loss is recognized at the time of the exchange. The basis of the original stock ($75) is transferred to the new stock and cash received, meaning S does not recognize a gain or loss at the time of the exchange.

As Part of a Plan of Reorganization, S Received the Following