Anderson Company exchanged land used in its business for another parcel of land with a fair market value of $160,000. In addition, Anderson received $40,000 in cash. Anderson will use the new parcel of land in its business. fte land that Anderson gave in exchange had an adjusted basis of $230,000 at the time of the exchange. What is Anderson's adjusted basis in the new land it received in the exchange?
A) $160,000.
B) $190,000.
C) $230,000.
D) $260,000.

Question

Quizplus · Accepted Answer

$190,000 ($160,000 fair market value of new land + $30,000 loss realized and deferred). ($160,000 FMV of the new land + $40,000 cash received) less $230,000 adjusted basis on land transferred = $30,000 loss realized
 Losses are never recognized on the exchange of like-kind property even if boot is received or paid
 the basis in the new land is $230,000, the basis of the old land less the $40,000 cash received

Anderson Company Exchanged Land Used in Its Business for Another