The owner of M&N Milling exchanged a milling machine used in his business for a new one. M&N Milling's basis in the machine was $20,000 and the owner still owes $6,000 related to the purchase of the machine. The other party to the exchange, M. Grinding, assumed the liability along with the machine and transferred a newer and smaller machine worth $30,000 to M&N Milling.
a. Calculate M&N Milling's
1. Realized gain on the exchange. $__________
2. Recognized gain on the exchange. $__________
b. Calculate the adjusted basis of the newer machine. $__________
a.Calculate M&N Milling's

Question

The owner of M&N Milling exchanged a milling machine used in his business for a new one. M&N Milling's basis in the machine was $20,000 and the owner still owes $6,000 related to the purchase of the machine. The other party to the exchange, M. Grinding, assumed the liability along with the machine and transferred a newer and smaller machine worth $30,000 to M&N Milling.
a. Calculate M&N Milling's 
1. Realized gain on the exchange. $__________
2. Recognized gain on the exchange. $__________
b. Calculate the adjusted basis of the newer machine. $__________
a.Calculate M&N Milling's

Quizplus · Accepted Answer

The Answer of The owner of M&N Milling exchanged a milling machine used in his business for a new one. M&N Milling's basis in the machine was $20,000 and the owner still owes $6,000 related to the purchase of the machine. The other party to the exchange, M. Grinding, assumed the liability along with the machine and transferred a newer and smaller machine worth $30,000 to M&N Milling.
a. Calculate M&N Milling's 
1. Realized gain on the exchange. $__________
2. Recognized gain on the exchange. $__________
b. Calculate the adjusted basis of the newer machine. $__________
a.Calculate M&N Milling's

The Owner of M&N Milling Exchanged a Milling Machine Used