If a like-kind exchange, if boot received is greater than the realized gain: No
ID: 2432237 • Letter: I
Question
If a like-kind exchange, if boot received is greater than the realized gain:
No gain or loss is recognized.
Loss is recognized to the extent of the excess of the boot received over the realized gain.
Gain is recognized to the extent of the realized gain.
Gain is recognized to the extent of the boot received.
None of the above.
a.No gain or loss is recognized.
b.Loss is recognized to the extent of the excess of the boot received over the realized gain.
c.Gain is recognized to the extent of the realized gain.
d.Gain is recognized to the extent of the boot received.
e.None of the above.
Explanation / Answer
The answer is "c. Gain is recognized to the extent of the realized gain."
In like-kind exchange, recognized gain is lesser of realised gain or boot
So, gain is recognized to the extent of the realized gain.
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