Nagin IncTransferred an Old Asset in Exchange for a New Asset

question 101

Multiple Choice

Nagin Inc.transferred an old asset in exchange for a new asset worth $84,000 and $6,000 cash.The old asset and new asset were like-kind properties.Which of the following statements is true?

• A)If Nagin's basis in the old asset was $95,000,Nagin can recognize a $5,000 loss.
• B)If Nagin's basis in the old asset was $85,000,Nagin must recognize a $6,000 gain.
• C)If Nagin's basis in the old asset was $79,200,Nagin must recognize a $6,000 gain.
• D)None of the above is true.

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Definitions:

Allergic

Having an immunity-based reaction to substances that are generally harmless, resulting in symptoms like sneezing, itching, or rash.

Contacts

Refers to contact lenses, thin lenses placed directly on the surface of the eye to correct vision.

Otosclerosis

A disorder characterized by abnormal bone growth in the middle ear, which can lead to hearing loss due to fixation of the stapes bone.

Conductive Hearing Loss

Hearing loss caused by an obstruction or damage to the outer or middle ear, affecting the transmission of sound to the inner ear.