7-6. Metro Corp. traded Land A for Land B. Metro originally purchased Land A for...
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7-6. Metro Corp. traded Land A for Land B. Metro originally purchased Land A for $50,000 and Land As adjusted basis was $25,000 at the time of the exchange. What is Metros realized gain or loss, recognized gain or loss, and adjusted basis in Land B in each of the following alternative scenarios?
a. The fair market value of Land A and of Land 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 Land A and of Land B is $40,000. The exchange qualifies as a likekind exchange.
c. The fair market value of Land A is $35,000 and Land B is valued at $40,000. Metro exchanges Land A and $5,000 cash for Land B. Land A and Land B are like-kind property.
d. The fair market value of Land A is $45,000 and Metro trades Land A for Land B valued at $40,000 and $5,000 cash. Land A and Land B are like-kind property.
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