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Summer Exchanges an Office Building Used in Her Business for Another

question 115

Essay

Summer exchanges an office building used in her business for another office building.Summer's office building has a FMV of $250,000 (basis of $180,000).The FMV of the new building is $300,000,and it is subject to a mortgage of $60,000,which is assumed by Summer.Summer also pays the other party $40,000 cash.
a.What is the amount of gain realized by Summer?
b.What is the amount of gain recognized by Summer?
c.What is the basis of the new building to Summer?


Definitions:

Stable

Characterized by the quality of being consistent, unchanging, and free from sudden alterations or volatility.

Long-Lasting

Continuing or enduring for an extended period of time without significant deterioration or loss of quality.

Temporary Activation

A state or condition of being enabled or made active for a limited period.

Temporary

Lasting for a limited period of time; not permanent or enduring.

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