LiO Company transferred an old asset with a $13,600 adjusted tax basis in exchange for a new asset worth $11,000 and $1,500 cash.Which of the following statements is false?
A)If the exchange is taxable,LiO recognizes an $1,100 loss.
B)If the exchange is nontaxable,LiO recognizes no loss.
C)If the exchange is nontaxable,LiO's tax basis in the new asset is $12,100.
D)None of the statements is false.

Question

Quizplus · Accepted Answer

If the exchange is nontaxable, LiO's tax basis in the new asset is $13,600, not $12,100.

LiO Company Transferred an Old Asset with a $13,600 Adjusted