Molly Exchanges a Small Machine (Adjusted Basis of $85,000;fair Market

question 91

Multiple Choice

Molly exchanges a small machine (adjusted basis of $85,000;fair market value of $78,000) used in her business and investment land (adjusted basis of $10,000;fair market value of $15,000) for a large machine (fair market value of $93,000) to be used in her business in a like­kind exchange.What is Molly's recognized gain or loss?

• A)$0
• B)$5,000
• C)($2,000)
• D)($7,000)
• E)None of these

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Definitions:

Biomedical Model

A system of medicine that emphasizes the diagnosis and treatment of disease through the application of scientific principles.

Implications

The possible effects or consequences of an action or decision, often considered in the context of planning or analysis.

Interest Rate

A charge, represented as a percentage of the principal, assessed by a lender for allowing a borrower to use their resources.

Future Value

The value of a current asset at a specified date in the future based on assumed growth rates or interest rates.