64.David Drummond and Edward Engels exchange business cars. David gives Edward acar with a basis of $15,000 and a fair market value of $21,500. David receives fromEdward a car with a basis of $12,500 (fair market value of $17,000) and $4,500 cash.What is David's recognized gain and basis in the new car?a.$6,500 and $17,000b.$4,500 and $15,000c.$0 and $10,500d.$2,000 and $12,50065.Jeff Jordan exchanges a truck used in his business plus $20,000 cash for a new truckwith a fair market value of $34,000. His adjusted basis in the old truck is $16,000 andits fair market value is $14,000. What is Jeff's recognized gain or loss and the basis inthe new truck?66.To be a nontaxable, like-kind exchange, all of the following conditions must be metexcept:©2015 CCH Incorporated. All Rights Reserved.Chapter 10
20CCH Federal Taxation—Comprehensive Topics67.Tom Thompson traded in a station wagon (used in his business) which had an adjustedbasis of $7,700 for a new one costing $26,900. The auto dealer allowed a trade-inallowance of $8,000 on the old station wagon and Tom paid $18,900 in cash. What isTom's basis in the new station wagon?68.Gary and Gerda Gray purchased a home for $125,000 on September 15, 2013. OnOctober 7, 2014 they were divorced, and as part of the divorce agreement, the home wastransferred to Gerda who sold the home on October 18, 2015 for $350,000. How muchcan Gerda exclude?a.$350,000b.$250,000c.$225,000d.$-0-e.None of the above69.Assume instead that in the preceding problem, as part of the divorce agreement, Garyretained ownership of the residence but the use of the home was granted to Gerda aslong as Gary owns the residence. If Gary sells the residence on October 18, 2015 for$350,000, how much can Gary exclude?70.Peter Paulson purchased a residence on February 19, 2013 for $180,000. On September7, 2015, a tornado completely destroyed their home. The home was insured for itsreplacement value and homes in Peter's area had appreciated greatly. He receivedproceeds of $420,000. How much does Peter include?©2015 CCH Incorporated. All Rights Reserved.Chapter 10
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