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T11F-Chp-12-2-HW-Prb - Name Page 1 of 2 Home work-Chapter...

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c2739a79ac843df1b3e8b02065bd8cbf6038193c.doc. Page 1 of 2 Name: Home work-Chapter 12. You may enter “e” if you believe no alternative given is correct. 1 The mechanism that allows for gains to be deferred and recognized later upon disposition of the second asset is: a. Basis adjustment b. Credit disallowance c. Loss disallowance 2 Under the like-kind exchange rules, when like-kind property is traded for like-kind property, a loss on a trade-in is: a. recognized and treated as a capital loss. b. recognized and treated as an ordinary loss. c. not recognized and decreases the basis of the replacement property. d. not recognized and increases the basis of the replacement property. e. None of these 3 Pat's Pastry Shop decides to remodel its offices this year. Pat's Pastry had furniture with a cost of $12,000 that was expensed in the year of purchase (Section 179). Pat’s Pastry traded that furniture for new furniture costing $22,000. Pauline's receives a $5,000 allowance trade-in for the old furniture. Pat borrowed the remaining $17,000 from Easy Finance Company. How much of the realized gain or loss is recognized on the exchange? a. $0 b. $5,000 c. $10,000 d. $17,000 e. Other 4 Wendell owns 115 acres of land with a fair market value of $57,000. He purchased the land as an investment for $35,000 in 1993. Wendell trades the land for a 122-acre parcel adjacent to other property he owns.
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