Olivia Exchanges Land with a $50,000 Basis Plus Marketable Securities

question 755

Essay

Olivia exchanges land with a $50,000 basis plus marketable securities with a $20,000 basis for a larger parcel of land worth $110,000 in a transaction that otherwise qualifies as a like- kind exchange. The FMV of the land and marketable securities exchanged by Olivia is $75,000 and $35,000 respectively.
a. What is the amount of gain realized and recognized by Olivia on each asset?
b. What is the amount of Olivia's basis in the new land?

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Definitions:

Schizophrenia

A chronic brain disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

Personality Disorders

Relatively stable, pervasive patterns of behavior and inner experience that are culturally discrepant and lead to distress or impairment; noted on Axis II of the DSM.

Benjamin Rush

A Founding Father of the United States known for his many contributions to American medicine, politics, and education.

American Psychiatry

A medical specialty in the United States focusing on the diagnosis, treatment, and prevention of mental, emotional, and behavioral disorders.