The general rule regarding the exchanged basis in a like-kind exchange is:
A) The basis is equal to the fair market value of the new property.
B) The basis is equal to the fair market value of the old property.
C) The basis is equal to the adjusted basis of the old property.
D) The basis is equal to the cost basis of the old property.
E) All of these.

Question

Quizplus · Accepted Answer

The general rule is that the basis of the new property acquired in a like-kind exchange is equal to the adjusted basis of the old property exchanged. This means that any gains or losses from the sale of the old property are carried over to the new property.

The General Rule Regarding the Exchanged Basis in a Like-Kind