Willie owns 115 acres of land with a fair market value of $57,000. He purchased the land as an investment for $35,000 in 1993. Willie trades the land for a 122-acre parcel adjacent to other property he owns. The 122 acres has a value of $57,000, and the exchange qualifies for like-kind deferral treatment. What is Willie's basis in the new parcel of land?
A)$- 0 -
B)$17,000
C)$35,000
D)$57,000
E)$74,000

Question

Quizplus · Accepted Answer

Since the exchange qualifies for like-kind deferral treatment, Willie's basis in the new parcel of land will be the same as his basis in the old parcel of land, which was $35,000. Therefore, C is the correct choice. The fair market value of the new parcel of land is irrelevant for this calculation.

Willie Owns 115 Acres of Land with a Fair Market