G&G Inc. transferred an old asset with a $110,300 adjusted tax basis plus $20,000 cash in exchange for a new asset worth $150,000. Which of the following statements is false?
A) The old asset's FMV is $150,000.
B) If the exchange is nontaxable, G&G's recognized gain is -0-.
C) If the exchange is nontaxable, G&G's tax basis in the new asset is $130,300.
D) None of these statements are false.

Question

Quizplus · Accepted Answer

The old asset's FMV is not $150,000 as it was only exchanged for a new asset worth $150,000. The FMV of the old asset is not relevant to this transaction.

G&G Inc Transferred an Old Asset with a $110,300 Adjusted Tax