Redoubt LLC Exchanged an Office Building Used in Its Business

question 97

Essay

Redoubt LLC exchanged an office building used in its business for a rental house. Redoubt originally purchased the building for $80,040, and it had an adjusted basis of $52,960 at the time of the exchange. The rental house had a fair market value of $62,040. Redoubt also received $7,020 of cash in the transaction. What is Redoubt's gain or loss recognized on the exchange? What is Redoubt's basis in the rental house?

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Definitions:

Cranial Nerves

Twelve pairs of nerves that emerge directly from the brain, rather than the spinal cord, and supply motor and sensory functions to the head and neck.

Ganglia

Structures containing a collection of nerve cell bodies, typically located outside the brain and spinal cord.

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord, connecting the CNS to limbs and organs.

Peripheral Nervous System

The section of the nervous system lying outside the brain and spinal cord, which contains all the nerves that connect the CNS to the rest of the body.