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 48

Olympia Corporation, of Kittery, Maine, wants to exchange its manufacturing machinery for Bangor Company's machinery. Both parties agree that that Olympia's machinery is worth $100,000 and that Bangor's machinery is worth $95,000. Olympia would like the transaction to qualify as a like-kind exchange. What could the parties do to equalize the value exchanged but still allow the exchange to qualify as a like-kind exchange How would the necessary change affect the tax consequences of the transaction