Nagin IncTransferred an Old Asset in Exchange for a New Asset

question 101

Multiple Choice

Nagin Inc.transferred an old asset in exchange for a new asset worth $84,000 and $6,000 cash.The old asset and new asset were like-kind properties.Which of the following statements is true?

• A)If Nagin's basis in the old asset was $95,000,Nagin can recognize a $5,000 loss.
• B)If Nagin's basis in the old asset was $85,000,Nagin must recognize a $6,000 gain.
• C)If Nagin's basis in the old asset was $79,200,Nagin must recognize a $6,000 gain.
• D)None of the above is true.

---

Definitions:

Insanity

A legal term for a mental dysfunction so severe that it exempts individuals from legal responsibility for their actions.

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions, and feelings.

Bipolar Disorder

A condition affecting mental health, defined by pronounced mood shifts from highs (mania or hypomania) to lows (depression).

Adaptive Behaviour

The collection of conceptual, social, and practical skills that people have learned to be able to function in their everyday lives.