I know the answer for this problem is FALSE, but cannot seem to have a clear understanding of the answer. Please explain as to why it is FALSE with the problem below:
In general, the basis of property to a corporation in a transfer that qualifies as a nontaxable exchange under § 351 is the basis in the hands of the transferor shareholder decreased by the amount of any gain recognized on the transfer
I know the answer for this problem is FALSE, but cannot seem to have a clear understanding of the answer. Please explain as to why it is FALSE with the problem below:
In general, the basis of property to a corporation in a transfer that qualifies as a nontaxable exchange under § 351 is the basis in the hands of the transferor shareholder decreased by the amount of any gain recognized on the transfer
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Kase, an individual, purchased some property in Potomac,Maryland, for $242,000 approximately 10 years ago. Kase isapproached by a real estate agent representing a client who wouldlike to exchange a parcel of land in North Carolina for KaseâsMaryland property. Kase agrees to the exchange.
| What is Kaseâs realized gain or loss, recognized gain or loss,and basis in the North Carolina property in each of the followingalternative scenarios? (Loss amounts should be indicated bya minus sign.) â1) The transaction qualifies as a like-kindexchange and the fair market value of each property is $715,000.(Leave no answer blank. Enter zero ifapplicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____ â2) The transaction qualifies as a like-kind exchange and the fairmarket value of each property is $202,000. (Leave no answerblank. Enter zero if applicable.) a) Realized Gain?___ b) recognized gain 0 âc) Adjusted basis in new property?_____
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