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7 September, 04:53

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington's gain or loss recognized on the exchange?

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  1. 7 September, 05:53
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    The correct answer here is $2000.

    Explanation:

    Given information -

    Original value of asset - $28,000

    Fair market value - $35,000

    Equipment received in exchange of transaction - $2000

    For taking out the Arlington's gain or loss on the exchange we will select the lesser of the f/given two, which are fair market value of equipment which is $2000 and other one is gain recognized by - $35,000 + $2000 - $28,0000 = $9000, so the lesser of the two is $2000.
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