[Anonymous]

Hey everyone, I am going through my review right now and am having a lot of trouble with nonmonetary exchanges. I did fine on them with REG but for some reason I’m getting really confused. I understand the basics but what really gives me trouble is the basis for assets after the exchange when boot is involved. Does anyone have a good way that they memorized/understood these transactions? I’m using Becker and have specific questions are below.

1. When boot is paid in an exchange lacking commercial substance, I know that gain isn’t recognized but in the formula to calculate the total gain, how come boot is is involved? (pg F2-39). It’s not involved in the determination of gain for exchanges lacking commercial substance and I don’t see any rules for it in the text.

2. When losses are recognized in an exchange lacking commercial substance, is the asset received equal to the BV of the asset given up (-) the loss or is it just equal to the FV?

So those are the two main questions I have but I find myself taking so long to answer each question only to ultimate get most of them wrong so any help is greatly appreciated. Thank you!