Luce Company Exchanged the Copyright on a Software Application for a Copyright

question 51

Multiple Choice

Luce Company exchanged the copyright on a software application for a copyright on a different software application. Luce's gain on the exchange was nontaxable (because the copyrights were like-kind) but was included in financial statement income. Which of the following statements is false?

• A) Luce's book basis in the copyright received is the copyright's cost (FMV).
• B) Luce's tax basis in the copyright received equals its tax basis in the copyright surrendered.
• C) Luce's future amortization deductions with respect to its tax basis in the copyright will be different from future amortization expense for financial statement purposes.
• D) None of these statements is false.

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