Marta and Luka exchanged like-kind equipment under I.R.C. Sec. 1031 on December 31, 2010. Marta gave up equipment worth $100,000, with an adjusted basis of $60,000. Luke gave up equipment worth $70,000, with an adjusted basis of $65,000; as well as stock worth $30,000 that had a basis of $15,000.
a. Calculate Marta's realized gain or loss, recognized gain or loss, and deferred gain or loss on the exchange of equipment.
b. Calculate Marta's basis in the new equipment received, as well as her basis in the stock.
c. Calculate Luka's realized gain or loss, recognized gain or loss, and deferred gain or loss on all parts of the transaction.
d. Calculate Luka's basis in the new equipment he received.
This question was answered on: Sep 16, 2020
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