If boot is received in a § 1031 like-kind exchange and gain is recognized, which formula correctly calculates the basis for the like-kind property received?
A) Adjusted basis of like-kind property surrendered + gain recognized - fair market value of boot received.
B) Fair market value of like-kind property surrendered + gain recognized + fair market value of boot received.
C) Fair market value of like-kind property received - postponed gain.
D) Only a. and c.
E) None of the above.

Question

Quizplus · Accepted Answer

In a § 1031 like-kind exchange, if boot is received and gain is recognized, the basis for the like-kind property received can be calculated using either of the following formulas:
1. Adjusted basis of like-kind property surrendered + gain recognized - fair market value of boot received.
2. Fair market value of like-kind property received - postponed gain.
Therefore, choice D "Only a. and c." is the correct answer as it includes the correct formula for calculating the basis for like-kind property received in this scenario.

If Boot Is Received in a § 1031 Like-Kind Exchange