In a nontaxable exchange,Henri traded in a truck having an adjusted basis of $8,500 and a FMV of $10,000,for a new truck having a FMV of $15,000.In addition,Henri paid cash of $5,000.What is Henri's basis in the new truck?
A)$5,000
B)$8,500
C)$13,500
D)$15,000

Question

Quizplus · Accepted Answer

C)Basis of property received = basis of property exchanged - boot received + gain recognized - loss recognized.The taxpayer exchanges a truck with an adjusted basis of $8,500 and cash of $5,000.No boot is received so no gain is recognized.The basis in the new truck is $13,500.

In a Nontaxable Exchange,Henri Traded in a Truck Having an Adjusted