Nixon Inc Transferred Asset a to an Unrelated Party in Exchange

question 61

Multiple Choice

Nixon Inc. transferred Asset A to an unrelated party in exchange for Asset Z and $15,750 cash. Nixon's tax basis in Asset A was $400,000, and Asset Z had a $510,000 appraised FMV. Which of the following statements is true?

• A) If Asset A and Asset Z are like-kind property, Nixon recognizes a $15,750 gain and takes a $400,000 basis in Asset Z.
• B) If Asset A and Asset Z are not like-kind property, Nixon recognizes a $110,000 gain and takes a $510,000 basis in Asset Z.
• C) If Asset A and Asset Z are like-kind property, Nixon recognizes a $15,750 gain and takes a $415,750 basis in Asset Z.If Asset A and Asset Z are like-kind property, Nixon recognizes no gain and takes a $400,000 basis in Asset Z.
• D) If Asset A and Asset Z are like-kind property, Nixon recognizes a $15,750 gain and takes a $415,750 basis in Asset Z.

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Definitions:

Punished

Subjected to a penalty or negative consequence as a result of undesired behavior, often to discourage that behavior.

Autobiographical Memories

Personal memories of events from one's own life, often with emotional significance and a sense of personal identity.

Cross-Culturally

pertaining to or involving the comparison of two or more different cultures or cultural practices, often to understand cultural diversity and commonalities.

Overly Specific Questions

Questions that are extremely detailed and narrow in scope, potentially limiting the breadth of answers.