Fred and Sarajane exchanged equipment in a qualifying like-kind exchange. Fred g
ID: 2611266 • Letter: F
Question
Fred and Sarajane exchanged equipment in a qualifying like-kind exchange. Fred gives up equipment with an adjusted basis of $12,000 (fair market value of $15,000) in exchange for Sarajane's equipment with a fair market value of $13,000 plus $2,000 cash. What is Sarajane's basis in the equipment received in the exchange, assuming her basis in the equipment given up was $12,000? a.$15,000 b.$14,000 c.$12,000 d.$0 e.None of these choices are correct.
The answer is B. $14000 Please show me the steps how to get the answer. Thanks!
Explanation / Answer
Answer a. $14,000 Adjusted Basis of Equipment for Sarjane Basis of Equipment given up 12,000 Cash Paid 2,000 Total Adjusted Value 14,000
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