Kai Owns an Apartment Building Held for Investment Purposes

question 48

Multiple Choice

Kai owns an apartment building held for investment purposes.The apartment building is worth $500,000,although it is subject to a mortgage of $100,000.Kai's basis in the apartment building is $380,000.Kai exchanges the apartment building for an office building.The office building has an FMV of $350,000.Kai receives $50,000 cash in addition to receiving the office building,and the other party assumes the apartment building mortgage.What is Kai's recognized gain on this exchange?

• A)$0
• B)$50,000
• C)$120,000
• D)$150,000

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Definitions:

Central Axis

The main or primary line around which a body or structure is organized or arranged.

Three-Layer Body Plan

The structural organization in animals that consists of three primary germ layers: ectoderm, mesoderm, and endoderm, which give rise to all tissues and organs of the organism.

Body Cavity

A hollow space within the body that houses vital organs and allows for their expansion, movement, and protection.

Gastrovascular System

A simple digestive system that has a single opening through which food is ingested and waste material is excreted, found in certain invertebrates like cnidarians and flatworms.