Chaney Exchanges a Truck Used in Her Business for Making

question 240

Essay

Chaney exchanges a truck used in her business for making deliveries for a smaller more fuel-efficient truck to be used in her business for making deliveries. The adjusted basis for her truck is $32,000. The smaller truck has a fair market value of $33,000. In addition, Chaney receives cash of $4,000.
a. Calculate Chaney's realized and recognized gain or loss.
b. a.?Amount realized ($33,000 + $4,000)?$37,000???Adjusted basis?(32,000)???Realized gain?$ 5,000???
Recognized gain?
$ 4,000??
Calculate Chaney's basis for the assets she received.
a.
$\begin{array}{ll}\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \\\text { Adjusted basis } & \underline{(32,000)} \\\text { Realized gain } & \$ 5,000 \\\\\text { Recognized gain } & \$ 4,000\end{array}$
a.
$\begin{array}{ll}\text { Amount realized }(\$ 33,000+\$ 4,000) & \$ 37,000 \\\text { Adjusted basis } & \underline{(32,000)} \\\text { Realized gain } & \$ 5,000 \\\\\text { Recognized gain } & \$ 4,000\end{array}$

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