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Business K exchanged an old asset $($FMV $$94,000)$ for a new asset $($FMV $$94,000).$ Business K$\text{'}$s tax basis in the old asset was

$$110,000.$

Required:

a$.$ Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable

transaction.

b$.$ Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset, assuming the exchange was a nontaxable

transaction.

c$.$ Six months after the exchange, Business K sold the new asset for $$101,000$ cash. How much gain or loss does Business $K$ recognize

if the exchange was taxable? How much gain or loss if the exchange was nontaxable?

Complete this question by entering your answers in the tabs below.

Required $A$

Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable

transaction.

Note: Losses should be indicated with a minus sign.

Compute Business K$$s realized loss, recognized loss, and tax basis in the new asset, assuming the exchange was a nontaxable transaction.

Note: Losses should be indicated with a minus sign.

Six months after the exchange, Business K sold the new asset for $$101,000$ cash. How much gain or loss does Business K recognize if the exchange was taxable? How much gain or loss if the exchange was nontaxable?

Note: Losses should be indicated with a minus sign.

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