Sarah exchanges a building and land (used in its business) for Tyler's land and building and some equipment (used in its business). The assets have the following characteristics: Adjusted Basis Fair Market Value Sarah's real property $3,600 $9,000 Tyler's real property 1,800 7,200 Equipment 1,620 2,700 a. What are Sarah's recognized gain or loss and basis for the land and building and equipment acquired from Tyler? Her recognized is s Her adjusted basis in the land and building she acquired from Tyler is $ and her adjusted basis in the equipment is $ b. What are Tyler's recognized gain or loss and basis for the land and building acquired from Sarah? Tyler's recognized is $ and his adjusted basis in the land and building he acquired from Sarah is

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sarah exchanges a building and land (used in her business) for Tyler’s land and building and some equipment (used in its business). The assets have the following characteristics:

|                     | Adjusted Basis | Fair Market Value |
|---------------------|----------------|-------------------|
| Sarah’s real property | $3,600         | $9,000            |
| Tyler’s real property | $1,800         | $7,200            |
| Equipment           | $1,620         | $2,700            |

**a.** What are Sarah’s recognized gain or loss and basis for the land and building and equipment acquired from Tyler?
Her recognized (blank) is $ (blank). Her adjusted basis in the land and building she acquired from Tyler is $ (blank), and her adjusted basis in the equipment is $ (blank).

**b.** What are Tyler’s recognized gain or loss and basis for the land and building acquired from Sarah?
Tyler’s recognized (blank) is $ (blank), and his adjusted basis in the land and building he acquired from Sarah is $ (blank).
Transcribed Image Text:Sarah exchanges a building and land (used in her business) for Tyler’s land and building and some equipment (used in its business). The assets have the following characteristics: | | Adjusted Basis | Fair Market Value | |---------------------|----------------|-------------------| | Sarah’s real property | $3,600 | $9,000 | | Tyler’s real property | $1,800 | $7,200 | | Equipment | $1,620 | $2,700 | **a.** What are Sarah’s recognized gain or loss and basis for the land and building and equipment acquired from Tyler? Her recognized (blank) is $ (blank). Her adjusted basis in the land and building she acquired from Tyler is $ (blank), and her adjusted basis in the equipment is $ (blank). **b.** What are Tyler’s recognized gain or loss and basis for the land and building acquired from Sarah? Tyler’s recognized (blank) is $ (blank), and his adjusted basis in the land and building he acquired from Sarah is $ (blank).
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