McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 26

Metro Corp. traded machine A for machine B. Metro originally purchased machine A for $50,000 and machine A's adjusted basis was $25,000 at the time of the exchange. What is Metro's realized gain or loss, recognized gain or loss, and adjusted basis in machine B in each of the following alternative scenarios
a. The fair market value of machine A and of machine B is $40,000 at the time of the exchange. The exchange does not qualify as a like-kind exchange.
b. The fair market value of machine A and of machine B is $40,000. The exchange qualifies as a like-kind exchange
d. The fair market value of machine A is $35,000 and machine B is valued at $40,000. Metro exchanges machine A and $5,000 cash for machine B. Machine A and machine B are like-kind property.
e. The fair market value of machine A is $45,000 and Metro trades machine A for machine B valued at $40,000 and $5,000 cash. Machine A and machine B are like-kind property.