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14. Ron Ryder and Joe Jetty exchanged like-kind business property. Ron had an adjusted basis of $30,000 in his property (fair market value of $33,000). Joe’s property had an adjusted basis of $21,000 and a fair market value of $23,000, and Joe gave Ron $10,000 in cash. Determine Ron’s and Joe’s realized gain or loss, recognized gain or loss, and the basis in their new property.
Expert Answer
| Ron has a realized gain of $3,000(23000+10000-30000), which is recognized, and the basis of his new property is $23,000. | |||||||||||
| Joe has a realized gain of $2,000(33000-21000-10000), recognizes no gain, and the basis of his new property is $31,000 | |||||||||||
