The general rule regarding the exchanged basis in the new property received in a like-kind exchange is:
A) The basis is equal to the fair market value of the new property.
B) The basis is equal to the fair market value of the old property.
C) The basis is equal to the adjusted basis of the old property.
D)The basis is equal to the cost basis of the old property.
E)All of these

Question

Quizplus · Accepted Answer

The basis of the new property received in a like-kind exchange is generally equal to the adjusted basis of the old property. This means that if the old property had depreciation or other adjustments to the basis, the new property will also have the same basis as the old property. This is important for calculating depreciation and gain or loss on the new property if it is sold in the future.

The General Rule Regarding the Exchanged Basis in the New