Your supervisor has asked you to research the following situation concerning Owen and Lisa Cordoncillo....
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Your supervisor has asked you to research the following situation concerning Owen and Lisa Cordoncillo. Owen and Lisa are brother and sister. In May 2022, Owen and Lisa exchange land they both held separately for investment. Lisa gives up a two-acre property in Texas with an adjusted basis of $2,000 and a fair market value of $6,000. In return for this property, Lisa receives from Owen a one-acre property in Arkansas with a fair market value of $5,500 and cash of $500. Owens adjusted basis in the land he ex-changes is $2,500. In March 2023, Owen sells the Texas land to a third party for $5,800. Required: Go to the IRS website (www.irs.gov). Locate and review Publication 544, Chapter 1, Nontaxable Exchanges. Write a file memorandum stating the amount of Owen and Lisas gain recognition for 2022. Also determine the effect, if any, of the subsequent sale in 2023. (An example of a file memorandum is available at the website for this textbook located at www.cengage.com
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