[Anonymous]

On July 1, 2013, in connection with a recapitalization ofYorktown Corporation, Robert Moore exchanged 1,000 shares of stock that cost him $95,000 for 1,000 shares of new stock worth $108,000 and bonds in the principal amount of $10,000 with a fair market value of $10,500. What is the amount of Moore’s recognized gain during 2013?

a. $0

b. $10,500

c. $23,000

d. $23,500

(b) The FMV of the bonds represents boot in the

reorganization. Therefore, the recognized gain is $10,500.

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Why no include the difference of $108,000 and $95,000 for stock exchanged? Stock exchange does not qualify for like kind property.

[stoleway]

No gain or loss is recognised on like kind exchange except there is a boot involved.

Moore gave up 10500 fair value of debt as part of the transaction. Debt given up will be recognised as a gain to moore.

Exchanging stock for stock is a like kind exchange and should not be considered in determining gain or loss

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

No gain or loss is recognised on like kind exchange except there is a boot involved.

Moore gave up 10500 fair value of debt as part of the transaction. Debt given up will be recognised as a gain to moore.

Exchanging stock for stock is a like kind exchange and should not be considered in determining gain or loss

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Anonymous]

LOL looks like I was off about recognition of gain/loss for stock for stock trade. Thanks for the explanation.

[Anonymous]

LOL looks like I was off about recognition of gain/loss for stock for stock trade. Thanks for the explanation.

[Author]

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