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14 December, 17:03

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

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  1. 14 December, 17:33
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    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
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