Parker Exchanges an Apartment Building in Wisconsin for Cassidy's Apartment

question 108

Essay

Parker exchanges an apartment building in Wisconsin for Cassidy's apartment building in Florida. Parker's building has a fair market value of $500,000, is encumbered by a $200,000 mortgage, and has a basis of $275,000. Cassidy's building has a fair market value of $350,000, is encumbered by a $50,000 mortgage, and has a basis of $175,000. They each assume the mortgages on the properties received. What are Parker's and Cassidy's amounts realized, their realized gain or loss, and their recognized gain or loss on the buildings exchanged?

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Definitions:

States Rights' Democratic Party

Known as the Dixiecrats, a short-lived segregationist political party in the United States that opposed civil rights laws for African Americans, maintaining a stance in favor of state's rights to legislate race relations.

Progressive Party

A political party in the United States that advocated for reform and progressive policies, notably active in the early 20th century.

American Freedom

The set of values, principles, and practices that define the liberties and rights pursued and protected in the United States, including freedom of speech, religion, and the pursuit of happiness.

Alger Hiss

A former U.S. government official who was accused of being a Soviet spy in 1948 and convicted of perjury in connection with this charge.