Sammy Exchanges Land Used in His Business in a Like-Kind

question 68

Essay

Sammy exchanges land used in his business in a like-kind exchange. The property exchanged is as follows:
Property Surrendered Property Received
Adj. Basis FMV Adj. Basis FMV Land $44,000 $60,000 $50,000 $43,000
Cash $ 5,000 $ 5,000
Liability on land $12,000 $12,000
The other party assumes the liability.
a. What is Sammy's recognized gain or loss?
b. What is Sammy's basis for the assets he received?

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Definitions:

Urinary

Relating to the system of organs responsible for the production, storage, and expulsion of urine.

Stratified Squamous

A type of epithelial tissue characterized by multiple layers of flat, closely packed cells, which provides protection against mechanical stress and abrasion.

Simple Cuboidal

Epithelial cells shaped like cubes or squares; these cells are found in glands and ducts and function in secretion or absorption.

Epithelium

a layer of cells forming the epidermis of the skin and the surface layer of mucous and serous membranes, playing roles in protection, secretion, and absorption.