[surfer4life949]

Hi,

I was wondering if someone could clarify this for me.

The Roger book I’m using says in a non monetary exchange that LACKS commercial substance to use the lower of the FMV of Asset given up, FMV of asset received, or BV of asset given up (+/- Cash paid/received).

In the same section for the NINJA notes, it just says to record the new asset at the BV of the asset given up.

Any help is appreciated 🙂

Created with Compare Ninja

B-85 OCT 2012
A-84 NOV 2012
R-90 JAN 2013
F-89 AUG 2012
Ethics-92 (3rd try)

I am DONE BABY!!!
Used Roger 2012 + Wiley + NINJA Notes

[jeff]

The context of the NINJA Notes is strictly from a gain standpoint (which is why the commercial substance rule is in place).

I could have included the different rules/scenarios, but for exam purposes – I wanted ONE thing to stick because I felt like it was more likely to be tested – that in a gain situation where the cash flows are not different and lack commercial substance – record the asset acquired at the book value of the asset given up.

Sorry I wasn't more clear…the 3 bullet points on the topic are all from a gain perspective.

-Jeff

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[surfer4life949]

Awesome, thanks Jeff!

B-85 OCT 2012
A-84 NOV 2012
R-90 JAN 2013
F-89 AUG 2012
Ethics-92 (3rd try)

I am DONE BABY!!!
Used Roger 2012 + Wiley + NINJA Notes

[Author]

Replies