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1.) Henrietta exchanged real property held for investment with abasis of $100,000 and a fair market value of $125,000 for otherreal property with a fair market value of $160,000 owned by Harrythat Henrietta planned to hold for investment. She also transferredto Harry 100 shares of Piano, Inc. stock worth $25,000 with anadjusted basis of $15,000. Harry’s basis in his property was$200,000.

a.)How much is Henrietta’s realized gain andher recognized gain?

b.)How much gain or loss is recognized byHarry?

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Hubert Koch
Hubert KochLv2
28 Sep 2019

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29. Joyce exchanges a machine used in her trade or business foranother machine. In addition, she gives 200 shares of AlphaCorporation stock which have a fair market value of $38,000 and abasis of $29,000. The old machine has an adjusted basis of $36,000and the new machine has a fair market value of $100,000. What isthe recognized gain or loss and the basis of the new machine?

a. $26,000 and $74,000.

b. $9,000 and $74,000.

c. $26,000 and $100,000.

d. $9,000 and $100,000.

e. None of the above.

30. In order to qualify for like-kind exchange treatment:

a. The form of the transaction must bean exchange.

b. Both the property transferred and theproperty given must be held for productive use in a trade orbusiness or for investment.

c. The property must be like kind.

d. All of the above.

e. None of the above.

31. In regard to nontaxable exchanges which, if any, of thefollowing is correct?

a. Neitherrealized gains or losses are recognized.

b. Realized gainsare not recognized but realized losses are recognized.

c. Realizedgains and losses are recognized.

d. Realized lossesare not recognized but realized gains are recognized.

e. None of theabove.

32. Taxpayer receives stock as a gift from his nephew. Theadjusted basis of the stock is $15,000 and the fair market value is$37,000. Taxpayer trades the stock for bonds with a fair marketvalue of $35,000 and $2,000 cash. What is his recognized gain andthe basis for the bonds?

a. $2,000,$17,000.

b. $0, $15,000.

c. $2,000,$15,000.

d. $22,000,$35,000.

e. None of theabove.

1.Peter Payerson yransfers an apartment building with anadjusted basis of $160,000 and fair marker value of $235,000 forCharlie Claussen's apartment building (adjusted basis $120,000)with a fair market value of $ 220,000 and cash of $55,000 fromCharlie. Peter's mortgage of $45,000 is assumed by Charlie whosemortgage of $85,000 is assumed by peter. What os the realized andrecognized gain or loss for Peter and Charlie and what are theirbases in their acquired buildings?

2. Steven Seller owned and managed a clothing store that wasdestroyed by a hurricane. He received an insurance award of$200,000 for the store, which had an adjusted basis of $120,000. Ayear later he replaced the clothing store with another one for$225,000

a. What is Seller's realized and recognized gain or loss, andthe basis of the replacement clothing store?

b. What is Seller's realized and recongnized gain or loss andthe basis if he replaced the clothinf store with a car repaur shopwhich he managed?

Bob owns a duplex used asrental property. The duplex has a basis of $86,000 and a fairmarket value of $300,000. Bob transfers the duplex to his brother,Carl, in exchange for a triplex that Carl owns. The triplex has abasis of $279,000 and a fair market value of $300,000. Two monthsafter the exchange, but in the same taxable year as the exchangewith his brother, Carl sells the duplex to his business associatefor $312,000.

a. What are the tax consequences to Bob with respect tothese transactions?

b. What are the tax consequences to Carl with respect tothese transactions?

Assume the same facts as above, except that Carl sellsthe duplex to an unrelated person more than two years after theexchange with Bob. Without taking into consideration any changes tothe adjusted basis of the property subsequent to the exchange withBob (such as for depreciation),

a.) how much, if any, is Bob’s realizedand recognized gain with respect to thesetransactions?

b.) Carl’s realized and recognized gain with respect tothese transactions?

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