Daniella Exchanges Business Equipment with a $100,000 Adjusted Basis for $10,000

question 41

Multiple Choice

Daniella exchanges business equipment with a $100,000 adjusted basis for $10,000 cash and business equipment with a $96,000 FMV.What is the amount of gain recognized on the exchange?

• A)$0
• B)$4,000
• C)$6,000
• D)$10,000

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Definitions:

Milligram

A unit of mass equal to one thousandth of a gram.

Gram

A measure of mass that corresponds to 1/1000th of a kilogram.

Kilograms

The base unit of mass in the International System of Units (SI), equivalent to 1000 grams.

Gram

A unit of measure for mass that is equal to 0.001 kilograms.