depreciation

Question 1

Like Kind Exchange. Which gain to recognize? What’s basis in new property?

Net debt relief $35000
cash & unlike property $80000
Net boot received 115000

FMV property received 260000
net boot received 115000
less basis given up (125000)
EQUALS realized gain 250000

Answer 1

Recognize lower of boot received 115000 or realized gain 250000. (choose 115000)

unrecognized gain = realized gain less amt recognized. 250000 - 115000 = 135000

basis in new property = FMV new property less unrecognized gain
260000 - 135000 = 125000 basis