@jrosen–taking a guess here–You record the gain for the amount of boot received and the new asset is valued at the book value of the asset given up because their cash flows are similar
On January 16, Tree Co. paid $60,000 in property taxes on its factory for the current calendar year. On April 2, Tree paid $240,000 for unanticipated major repairs to its factory equipment. The repairs will benefit operations for the remainder of the calendar year. What amount of these expenses should Tree include in its third quarter interim financial statements for the three months ended September 30?
It's more complex. If the boot received/FV Received is < 25% then it's multiplied by the realized gain. The new asset value is a plug: Old basis + Gain – Cash. If > than 25% then it's a monetary exchange and gains are recognized in their entirety. Same plug method.
I'm going to call it quits since I got little sleep last night. I hope you guys are around tomorrow night. I would love to get more participants in our quizzing. i really needed this break from just going through the WTB.
JRosen–I have that as being for transactions that have commercial substance in my notes, not for transactions that lack commerical substance. Are you sure it is for transactions that lack commercial substance?
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