In-kind Exchange Property Basis

Realized gain/loss
= (FMV of property received - Boot paid + Boot received) LESS (Old cost - Depreciation)

Recognized gain/loss = LESSOR OF:

• Realized gain (formula above);
• Boot received
• Net relief from liabilities
• Realized LOSS is not recognized (recognized amount is $0)

New property basis
= Adjusted basis of old property + Boot paid + Gain recognized - Boot received