Exchange for a new asset


Problem: G&G Inc. transferred an old asset with a $110,300 adjusted tax basis plus $20,000 cash in exchange for a new asset worth $150,000. Which of the following statements is false?

A. The old asset's FMV is $150,000
B. If the exchange is nontaxable, G&G's recognized gain is -0-
C. If the exchange is nontaxable, G&G's tax basis in the new asset is $130,300
D. None of the statements is false

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Finance Basics: Exchange for a new asset
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