Like Kind Exchange

Question 1

3 steps in finding necessary values for like kind exchange

Answer 1

Find realized gain, then recognized gain, the basis of new property

Question 2

How do you find realized gain (no boot given or received)

Basis Old -17000
Basis New - 20000

Answer 2

FMV received - Adjusted basis given up

3000 gain realized

Question 3

How do you find recognized gain (no boot given or received)

Basis Old -17000
Basis New - 20000

Answer 3

The lesser of the gain realized or boot received

0 - lesser of 3000 or 0 (no boot received)

Question 4

How do you find basis of new property (no boot given or received)

Basis Old -17000
Basis New - 20000

Answer 4

Adjusted basis of property given up + gain recognized

17000 + 0

Question 5

How do you find realized gain (no boot given or received)

Basis Old -23000
Basis New - 20000

Answer 5

FMV received - Adjusted basis given up

3000 LOSS

Question 6

How do you find recognized gain (no boot given or received)

Basis Old -23000
Basis New - 20000

Answer 6

Realized loss is never recognized in like-kind exchanges

0

Question 7

How do you find basis of new property (no boot given or received)

Basis Old -23000
Basis New - 20000

Answer 7

Adjusted basis of property given up

23000

Question 8

How do you find realized gain (2000 boot PAID)

Basis Old -17000
Basis New - 22000

Answer 8

(FMV received - boot paid) - adjusted basis of auto given up

22000 - 2000 - 17000

3000 gain

Question 9

How do you find recognized gain (2000 boot PAID)

Basis Old -17000
Basis New - 22000

Answer 9

Lesser of realized gain or boot received

0 - no boot received!

Question 10

How do you find basis of new property (2000 boot PAID)

Basis Old -17000
Basis New - 22000

Answer 10

Adjusted basis property given up + boot paid

17000 + 2000

19000

Question 11

How do you find realized gain (3500 auto trailer received)

Basis Old -17000
Basis New - 16500

Answer 11

FMV new auto + boot received (trailer) - adjusted basis auto given up

16500 + 3500 - 17000

3000 gain

Question 12

How do you find recognized gain (3500 auto trailer received)

Basis Old -17000
Basis New - 16500

Answer 12

lesser of realized gain (3000) or boot received (3500)

3000

Question 13

How do you find basis of new property (3500 auto trailer received)

Basis Old -17000
Basis New - 16500

Answer 13

Adjusted basis property given up + gain recognized - boot received

17000 + 3000 - 3500

16500