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CHAPTER 10: LACK OF COMMERCIAL SUBSTANCE EXCHANGE DATA OLD LAND FMV OLD LAND COST. NEW LAND FMV CASH PAID 105,000 43,750 123,000 18,000 NOTE: COMMERCIAL SUBSTANCE REQUIRES THAT FL FLOWS ARE IMPACTED BY THE EXCHANGE 105,000 43,750 61,250 N/A NO GAIN RECOGNIZED SINCE TRANSACTION LACKS COMMERCIAL SUBSTANCE 2 GAIN ANALYSIS 3 OLD LAND FAIR VALUE 4 OLD LAND COST 5 GAIN REALIZED 16 17 GAIN RECOGNIZED 18 19 20 21 NEW LAND 22 OLD LAND 23 CASH 24 25 26 27 28. NOTE: OLD LAND COST 29 PLUS CASH PAID 30 NEW LAND 61,750 43,750 18.000 NOTE: FMV NEW = 123,000 LESS GAIN DEF (61,250) 61:750 61 750 43,750 18,000 61,750 BASIS NEW LAND 61,750 N 0 105,000 43,750 84.000 21,000 EXCHANGE DALA OLD LAND EMV OLD LAND COST 3 NEW LAND FMV 9 CASH RECEIVED 0 11 GAIN ANALYSIS 12 OLD AND FAIR VALUE 43 OLD LAND COST 44 GAIN REALIZED 45 46 GAIN RECOGNIZED 105,000 43,750 61,250 547 12,250 40 49 NEW LAND 50 CASH OLD LAND GAIN A PORTION OF GAIN RECOGNIZED SINCE CASH RECEIVED (CASH/TOTAL AMOUNT RECEIVED) X GAIN REALIZED [21,000/(21,000 + 84,000)) X 61,250 NOTE: GAIN DEFERRED 35,000 21,000 43,750 12,250 56,000 56,000 2889886988988 56 NOTE: OLD LAND COST PLUS GAIN RECOGNIZED LESS CASH RECEIVED NEW LAND 43,750 12,250 (21,000) 35,000 NEW AND FM LESS GAIN DEFERRED NEW LAND 84,000 (49,000) 35.000 CHAPTER 10: LACK OF COMMERCIAL SUBSTANCE EXCHANGE DATA OLD LAND FMV OLD LAND COST. NEW LAND FMV CASH PAID 105,000 43,750 123,000 18,000 NOTE: COMMERCIAL SUBSTANCE REQUIRES THAT FL FLOWS ARE IMPACTED BY THE EXCHANGE 105,000 43,750 61,250 N/A NO GAIN RECOGNIZED SINCE TRANSACTION LACKS COMMERCIAL SUBSTANCE 2 GAIN ANALYSIS 3 OLD LAND FAIR VALUE 4 OLD LAND COST 5 GAIN REALIZED 16 17 GAIN RECOGNIZED 18 19 20 21 NEW LAND 22 OLD LAND 23 CASH 24 25 26 27 28. NOTE: OLD LAND COST 29 PLUS CASH PAID 30 NEW LAND 61,750 43,750 18.000 NOTE: FMV NEW = 123,000 LESS GAIN DEF (61,250) 61:750 61 750 43,750 18,000 61,750 BASIS NEW LAND 61,750 N 0 105,000 43,750 84.000 21,000 EXCHANGE DALA OLD LAND EMV OLD LAND COST 3 NEW LAND FMV 9 CASH RECEIVED 0 11 GAIN ANALYSIS 12 OLD AND FAIR VALUE 43 OLD LAND COST 44 GAIN REALIZED 45 46 GAIN RECOGNIZED 105,000 43,750 61,250 547 12,250 40 49 NEW LAND 50 CASH OLD LAND GAIN A PORTION OF GAIN RECOGNIZED SINCE CASH RECEIVED (CASH/TOTAL AMOUNT RECEIVED) X GAIN REALIZED [21,000/(21,000 + 84,000)) X 61,250 NOTE: GAIN DEFERRED 35,000 21,000 43,750 12,250 56,000 56,000 2889886988988 56 NOTE: OLD LAND COST PLUS GAIN RECOGNIZED LESS CASH RECEIVED NEW LAND 43,750 12,250 (21,000) 35,000 NEW AND FM LESS GAIN DEFERRED NEW LAND 84,000 (49,000) 35.000

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