Teco Inc and MW Company Exchanged Like-Kind Assets

question 69

Multiple Choice

Teco Inc. and MW Company exchanged like-kind assets. Teco's asset had an $80,000 FMV and $53,900 adjusted tax basis, and MW's asset had an $87,500 FMV and a $28,100 adjusted tax basis. Teco paid $7,500 cash to MW as part of the exchange. Which of the following statements is false?

• A) Teco's realized gain is $26,100 and recognized gain is -0-.
• B) MW's realized gain is $59,400 and recognized gain is $7,500.
• C) Teco's basis in its newly acquired asset is $61,400.
• D) MW's basis in its newly acquired asset is $35,600.

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Definitions:

Operant Conditioning

Operant Conditioning is a learning process through which the strength of a behavior is modified by reinforcement or punishment.

Reflexive Behaviour

Automatic, involuntary actions or responses to stimuli, that do not require conscious thought.

Operant Conditioning

The process of acquiring knowledge by which a behavior's level is modified using encouragement or deterrents.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is initially elicited by the second stimulus is eventually evoked by the first stimulus alone.