LiO Company Transferred an Old Asset with a $13,600 Adjusted

question 67

Multiple Choice

LiO Company transferred an old asset with a $13,600 adjusted tax basis in exchange for a new asset worth $11,000 and $1,500 cash. Which of the following statements is false?

• A) If the exchange is taxable, LiO recognizes an $1,100 loss.
• B) If the exchange is nontaxable, LiO recognizes no loss.
• C) If the exchange is nontaxable, LiO's tax basis in the new asset is $12,100.
• D) None of these statements is false.

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Definitions:

Intermediate Good

A product utilized in the manufacture of a final good or finished product, not sold directly to end consumers.

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A place or business that specializes in growing and selling plants and trees for gardening and landscaping within a local area.

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