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Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington's recognized gain or loss on the exchange? Group of answer choices

Respuesta :

Answer:

The Arlington's recognized gain or loss on the exchange is $2,000

Explanation:

For computing the recognize loss or gain, the following treatment is to be done.

The lower of

1. Amount received

2. Realized gain

The amount received is $2,000 and the realized gain is the difference between the purchase cost and the fair market value i.e

= $35,000 - $28,000

= $7,000

So, the lower would be $2,000