Itak Company transferred an old asset with a $44,300 adjusted tax basis in exchange for a new asset worth $48,000 and $3,000 cash. Which of the following statements is false?

Question

Quizplus · Accepted Answer

In a taxable exchange, Itak would recognize a gain of $6,700, calculated as the sum of the new asset's value ($48,000) and cash received ($3,000) minus the old asset's adjusted tax basis ($44,300). In a nontaxable exchange, Itak would not recognize any gain related to the exchange itself, and the tax basis of the new asset would be adjusted to include the basis of the old asset plus any gain recognized, if applicable. Therefore, none of the statements provided are false.

Itak Company Transferred an Old Asset with a $44,300 Adjusted