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ms500
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Joined: 30 Jun 2008
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Posted: 04 Oct 2009 at 16:39 \| IP Logged

sumeetjsm wrote:

In exchange base if brought forward + gain received is exempt. Thus

10,000 + 5,000= 15,000 base b/f

Gain on land 1,000 is exempt

Loss is adjusted i.e, loss of 3,000 on the stock.

Net effect base= 15,000-3000= 12,000

hi sumeet

Gain on land 1,000 is exempt
I never knew abt this rule, can you give me the source, if I am not wrong, becker doesn't say anything abt this rule

thanks in advance

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CPAINNJ
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Joined: 10 Jul 2009
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Posted: 04 Oct 2009 at 21:07 \| IP Logged

why is $1000 exempt ?

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onlyregleft
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Joined: 24 Sep 2009
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Posted: 05 Oct 2009 at 06:20 \| IP Logged

Basis of like-kind property received is the basis of like-kind property given:

(a) + gain recognized

(b) + basis of boot given (money or property not of a like-kind)

(d) - FMV of boot received.

= $10,000 (basis of like-kind property given) + $5,000 (basis of boot given) - $3,000 (loss recognized)* = $12,000.

*Gain or loss is recognized if the boot given consists of property with a FMV different from its basis. In this case the stock's FMV is lower than the stock's adjusted basis, so a loss is recognized. $5,000-$2,000 = $3,000

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venchlu
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Joined: 18 Aug 2009
Location: United States
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Posted: 05 Oct 2009 at 09:43 \| IP Logged

Hi ,

About onlyregleft's reply, the source is from p 492 of wiley book 2009. Hope this will help.

jrupa
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Joined: 16 Aug 2007
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Posts: 444

Posted: 05 Oct 2009 at 09:46 \| IP Logged

i am confused that thegain of 1000 is not taken yyy?

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