Chaney exchanges a truck used in her business for making deliveries for a smaller more fuel-efficient truck to be used in her business for making deliveries.The adjusted basis for her truck is $32,000.The smaller truck has a fair market value of $33,000.In addition,Chaney receives cash of $4,000.
a.Calculate Chaney's realized and recognized gain or loss.
b.Calculate Chaney's basis for the assets she received.
a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$ a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$

Question

Chaney exchanges a truck used in her business for making deliveries for a smaller more fuel-efficient truck to be used in her business for making deliveries.The adjusted basis for her truck is $32,000.The smaller truck has a fair market value of $33,000.In addition,Chaney receives cash of $4,000.
a.Calculate Chaney's realized and recognized gain or loss.
b.Calculate Chaney's basis for the assets she received.
 a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$ a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$

Quizplus · Accepted Answer

The Answer of Chaney exchanges a truck used in her business for making deliveries for a smaller more fuel-efficient truck to be used in her business for making deliveries.The adjusted basis for her truck is $32,000.The smaller truck has a fair market value of $33,000.In addition,Chaney receives cash of $4,000.
a.Calculate Chaney's realized and recognized gain or loss.
b.Calculate Chaney's basis for the assets she received.
 a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$ a.$\begin{array}{ll}
\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \
\text { Adjusted basis } & \underline{(32,000)} \
\text { Realized gain } & \$ 5,000\\text { Recognized gain }&\$4,000
\end{array}$

Chaney Exchanges a Truck Used in Her Business for Making