Exam 28: Property Transactions: Nontaxable Exchanges

Kole owns a warehouse used in his business which has an adjusted basis of $240,000 and is subject to a mortgage with an $80,000 principal balance.Kole exchanges the warehouse for land worth $320,000.In addition,he receives cash of $40,000,and the other party will assume the mortgage.What is Kole's realized gain?

Alex,a commercial fisherman,owns a fishing boat with a $1,600,000 basis.The boat is destroyed in a hurricane,and Alex collects $2,000,000 from the insurance company.He purchases another boat for $1,550,000.What is the amount of the gain recognized on the transaction?

If an exchange qualifies as a like-kind exchange,nonrecognition of gain or loss is elective.

Risa exchanges an office building with a $600,000 adjusted basis for an apartment building with a $1,000,000 FMV and $200,000 of marketable securities.What is Risa's basis for the apartment building?

Jenna,who is single,sold her principal residence on December 1,2018,and excluded the $150,000 gain because she met the ownership and usage requirements under Sec.121.Jenna purchased another residence in Pensacola on January 1,2019,that she occupied until July 1,2019,when she received a new job offer from an employer in Miami.She sells the Pensacola residence on October 1,2019,and realizes a gain of $40,000.Jenna may exclude what amount of the gain from the sale on October 1,2019?

An investor exchanges an office building located in Niagara Falls,NY,for an office building located in Niagara Falls,Ontario.The exchange does not qualify as like-kind.

Replacing a building with land qualifies as replacement property under the involuntary conversion rules relevant to a casualty.

All of the following statements are true with regard to personal residences except

A sole proprietor exchanges an office building used in her business for undeveloped land she plans to hold for investment purposes.The exchange will qualify as like-kind.

If the threat of condemnation exists and the taxpayer has reasonable grounds to believe that the property will be condemned,the taxpayer may elect to defer gain even if the taxpayer sells the property to a party other than the governmental unit that is threatening to condemn the property.

Kuda owns a parcel of land she acquired on June 1,2012,as an investment.She exchanges the land on July 5,2019,for a storage building to be used in her business and marketable securities to be held as an investment.The marketable securities' holding period begins on

Which of the following is not an unforeseen circumstance for purposes of obtaining a partial exclusion of a gain on the sale of a home?

Ron's building,which was used in his business,was destroyed in a fire.Ron's adjusted basis in the building was $210,000,and its FMV was $330,000.Ron filed an insurance claim and was reimbursed $300,000.In that same year,Ron invested $240,000 of the insurance proceeds in another business building.Ron's basis in the new building is

A owns a ranch in Wyoming,which B offers to purchase.A is not willing to sell the ranch but is willing to exchange the ranch for an apartment complex in Louisiana.The complex is available for sale.B purchases the apartment complex in Louisiana from C and transfers it to A in exchange for A's ranch.The ranch and the complex each have a $1,000,000 fair market value.Which of the following is true?

Hannah,a single taxpayer,sold her primary residence on January 1,2019.Her total realized gain is $210,000.The house was acquired on January 1,2009,and rented to tenants until December 31,2015.Hannah moved in on January 1,2016,and used the house as her principal residence until the sale.During the rental period,$30,000 of depreciation was deducted.Due to the sale of the house in 2019,Hannah will recognize a gain of

Which of the following statements is not true with regard to like-kind exchanges?

Bobbie exchanges farmland (adjusted basis $160,000)for other farmland that has a FMV of $140,000.Bobbie also receives $30,000 cash.Bobbie's basis in the new farmland is

The basis of non-like-kind property received in an otherwise nontaxable exchange is the basis in the hands of the transferor at the date of the exchange.

Dean exchanges a business storage facility with a $120,000 adjusted basis for $40,000 cash and a parking lot with a $140,000 FMV.What is the amount of gain which Dean recognizes on the exchange?

Kuda owns a parcel of land she acquired on June 1,2012,as an investment.She exchanges the land on July 5,2019,for a storage building to be used in her business and marketable securities to be held as an investment.On what date does the storage building's holding period begin?