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Lily exchanges a small storage shed she uses in her rental business for an assortment of vehicles and tools owned by Kendall, which she will use in her rental business. The adjusted basis of Lily's building is $120,000 and the fair market value is $170,000. Which of the following statements is correct?

a) Lily's recognized gain is $50,000 and her basis for the vehicles and tools received is $120,000.

b) Lily's recognized gain is $50,000 and her basis for the vehicles and tools received is $170,000.

c) Lily's recognized gain is $0 and her basis for the vehicles and tools received is $120,000.

d) Lily's recognized gain is $0 and her basis for the vehicles and tools received is $170,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M938451

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