Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Chapter 9, Problem 6QPD
To determine
Identify whether the exchange is non-taxable to Firm Q and Company M.
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Abbott exchanges land in a transaction that lacks commercial substance. The net book value of the land exchanged is $50,000. In exchange Abbott receives land with a fair value of $60,000 and $20,000 in cash. What is the gain that Abbott should recognize?
Prater Incorporated enters into an exchange in which it gives up its warehouse on 10 acres of land and receives a tract of
land. A summary of the exchange is as follows: What are Prater's realized and recognized gain on the exchange and its
basis in the assets it received in the exchange? Answer is complete but not entirely correct.
Prater Incorporated enters into an exchange in which it gives up its warehouse on
10 acres of land and receives a tract of land. A summary of the exchange is as
follows:
Transferred
Warehouse
Land
Mortgage on warehouse
Cash
Assets Received
Land
FMV
$ 432,500
Original
Basis
Accumulated
Depreciation
$ 278,000
$ 55,500
55,000
55,000
63,750
21,000
21,000
FMV
$ 444,750
What are Prater's realized and recognized gain on the exchange and its basis in the
assets it received in the exchange?
Answer is complete but not entirely correct.
Description
Realized gain
Amount
$
167,250
Recognized gain
$
84,750 x
Adjusted basis in new property
$ 278,000
Case A. Kapono Farms exchanged an old tractor for a newer model. The old tractor had a book value of $12,000(original cost of $28,000 less accumulated depreciation of $16,000) and a fair value of $9,000. Kapono paid$20,000 cash to complete the exchange. The exchange has commercial substance.Required:1. What is the amount of gain or loss that Kapono would recognize on the exchange? What is the initial value ofthe new tractor?2. Repeat requirement 1 assuming that the fair value of the old tractor is $14,000 instead of $9,000.
Chapter 9 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 9 - Prob. 1QPDCh. 9 - Prob. 2QPDCh. 9 - Prob. 3QPDCh. 9 - Prob. 4QPDCh. 9 - Prob. 5QPDCh. 9 - Prob. 6QPDCh. 9 - Prob. 7QPDCh. 9 - Prob. 8QPDCh. 9 - Prob. 9QPDCh. 9 - Explain the difference between a substituted basis...
Ch. 9 - Prob. 11QPDCh. 9 - Prob. 12QPDCh. 9 - Prob. 13QPDCh. 9 - Prob. 14QPDCh. 9 - Prob. 15QPDCh. 9 - Prob. 1APCh. 9 - Prob. 2APCh. 9 - Prob. 3APCh. 9 - Prob. 4APCh. 9 - Prob. 5APCh. 9 - Prob. 6APCh. 9 - This year, Neil Inc. exchanged a business asset...Ch. 9 - Prob. 8APCh. 9 - Prob. 9APCh. 9 - XYZ exchanged an old building for a new like-kind...Ch. 9 - Prob. 11APCh. 9 - Prob. 12APCh. 9 - Prob. 13APCh. 9 - Prob. 14APCh. 9 - Prob. 15APCh. 9 - Prob. 16APCh. 9 - Prob. 17APCh. 9 - Prob. 18APCh. 9 - Prob. 19APCh. 9 - On October 18 of last year, a flood washed away...Ch. 9 - Prob. 21APCh. 9 - Prob. 22APCh. 9 - Prob. 23APCh. 9 - Mr. ZJ owns a sole proprietorship. The business...Ch. 9 - Prob. 25APCh. 9 - Prob. 26APCh. 9 - Prob. 27APCh. 9 - Prob. 28APCh. 9 - Prob. 29APCh. 9 - Prob. 30APCh. 9 - Prob. 31APCh. 9 - Prob. 32APCh. 9 - Prob. 33APCh. 9 - Prob. 34APCh. 9 - Prob. 1IRPCh. 9 - Prob. 2IRPCh. 9 - Prob. 3IRPCh. 9 - Prob. 4IRPCh. 9 - Prob. 5IRPCh. 9 - Prob. 6IRPCh. 9 - Prob. 7IRPCh. 9 - Prob. 8IRPCh. 9 - Prob. 9IRPCh. 9 - Prob. 10IRPCh. 9 - Prob. 1RPCh. 9 - Prob. 2RPCh. 9 - Prob. 3RPCh. 9 - Prob. 1TPCCh. 9 - Prob. 2TPCCh. 9 - Prob. 3TPCCh. 9 - Croyden is a calendar year, accrual basis...
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