Which One of the Following Qualifies as a Like-Kind Exchange

question 58

Multiple Choice

Which one of the following qualifies as a like-kind exchange?

• A)An auto used by a business that was traded in for a new model.
• B)A home owned and lived in by a taxpayer exchanged for a new personal residence.
• C)IBM stock exchanged for Exxon stock.
• D)Land used in business traded in for a different parcel of land also for business use.
• E)None of the above are like-kind property.

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Definitions:

Fixed Overhead

Overhead expenses that remain constant regardless of a company's level of production or sales.

Raw Material

Basic materials used in the production process that are transformed into finished goods through manufacturing.

Fixed Overhead

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance, necessary for maintaining a business’s operations.

Direct Labor-Hours

A unit of measure representing the actual hours worked by employees directly involved in the production process.