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ms500
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Posted: 04 Oct 2009 at 13:45 \| IP Logged

Land held for investment plus shares of stock are exchanged for investment real estate with a FMV of $13,000. The land transferred had an adjusted basis of $10,000 and FMV of $11,000; the stock had an adjusted basis of $5,000 and FMV of $2,000. A $3,000 loss is recognized on the transfer of stock. The basis of the acquired real estate is $12,000 ($10,000 + $5,000 -$3,000)

Appreciate if some one explain above

Thanks

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ms500
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Posted: 04 Oct 2009 at 15:22 \| IP Logged

hi

any one....

thanks in advance

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jrupa
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Posted: 04 Oct 2009 at 15:33 \| IP Logged

yes i think u are right

ms500
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Posted: 04 Oct 2009 at 16:02 \| IP Logged

jrupa wrote:

yes i think u are right

hi jrupa

actually, above example is from divya's notes R1

I am unable to understand the calculation,missing some thing, appreciate if u can explain above

thanks in advance

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sumeetjsm
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Posted: 04 Oct 2009 at 16:19 \| IP Logged

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

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