Unformatted text preview: Adjusted Basis $23,000 New Basis $ 5,000 Gain b. Lily’s realized gain is $3,000 and she does not have a recognized gain since there is not a recognized gain allowed when a boot is given. Her basis in the new property is $27,000. This can be calculated as follows: $30,000 FMV $20,000 Old Basis ($ 7,000) Boot $ 7,000 Boot ($25,000) Adjusted Basis $27,000 New Basis $ 3,000 Gain Ch. 11: Question 50 a. Seller’s realized gain is $80,000 and he does not have a recognized gain since the replacement cost is greater than the insurance proceeds. The basis of the replacement clothing store is $145,000. This can be calculated as follows: $200,000 Insurance Award $225,000 Replacement ($120,000) Adjusted Basis ($ 80,000) Gain $ 80,000 Gain $145,000 Replacement Basis b. Seller’s realized gain is $80,000 and his recognized gain is $80,000. Since this is not a like-kind exchange, there is not a basis of the replacement. The gain is the same calculation as above. Ch. 11: Question 52 The basis of the new truck is: d. $46,400. This can be calculated as follows: $14,000 Adjusted Basis $40,000 New Truck ($ 8,000) Trade-in Allowance $ 6,400 Gain $ 6,400 Gain $46,400 New Basis...
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- Fall '14
- Accounting, basis, Apartment, The new black