Eliot Inc. transferred an old asset with a $53,100 adjusted tax basis plus $5,000 cash in exchange for a new asset worth $75,000. Which of the following statements is false?
A) The old asset's FMV is $70,000.
B) If the exchange is nontaxable, Eliot's recognized gain is $5,000.
C) If the exchange is nontaxable, Eliot's tax basis in the new asset is $58,100.
D) None of these statements are false.

Question

Quizplus · Accepted Answer

If the exchange is nontaxable, Eliot's recognized gain is not $5,000; in a nontaxable exchange, no gain is recognized.

Eliot Inc Transferred an Old Asset with a $53,100 Adjusted Tax