Question: Cardinal Properties Inc exchanges real estate used in its business

Cardinal Properties, Inc., exchanges real estate used in its business along with stock for real estate to be held for investment. The stock transferred has an adjusted basis of $45,000 and a fair market value of $50,000. The real estate transferred has an adjusted basis of $85,000 and a fair market value of $190,000. The real estate acquired has a fair market value of $240,000.
a. What is Cardinal's realized gain or loss?
b. Its recognized gain or loss?
c. The basis of the newly acquired real estate?

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  • CreatedMay 25, 2015
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