Below is my improvised set of formulas I've been using for Like-Kind exchanges:
Realized G/L = FMV (Old) – AB (Old)
OR
Realized G/L = FMV (New) – AB (Old) + Boot Received – Boot Paid
Recognized Gain = The lower of Realized Gain OR Boot Received
{Recognize ZERO, if the lower value is below 0;
Remember: Losses are never recognized in like-kind exchanges}
Deferred G/L = Realized G/L – Recognized G/L
Basis (New) = AB (Old) + Recognized G – Boot Received + Boot Paid
OR
Basis (New) = FMV (New) + Deferred L – Deferred G
Steps:
Determine:
1) Realized G/L
2) Recognized G/L
3) Basis of new property
Realized G/L:
+10,000 FV Of New
-20,000 AB of Old
+3,000 Cash Received/Boot Received
——————-
= – $7,000
Recognized G/L:
Lower of Realized Gain or Boot Received:
= 0
{Recognize ZERO, if the lower value is below 0;
Remember: Losses are never recognized in like-kind exchanges}
Basis (New)
+ 20,000 ……. AB of Old
+ 0 …………….. Recognized Gain
-3,000 ………… Boot Received
———————-
= $17,000
============
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