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

Exercise 42

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
c.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.
d.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.