Jack Exchanged Land with an Adjusted Basis of $65,000 Subject

question 75

Multiple Choice

Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV) of stock owned by Hayden.Hayden takes the land subject to the liability.Jack incurs $500 of selling expenses.What is the amount of Jack's realized gain on the exchange?

• A)($14,000)loss
• B)($14,500)loss
• C)$6,500 gain
• D)$7,000 gain

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Definitions:

Cognitive Mediational

Relating to the theory that cognitive processes mediate the relationship between stimuli and emotional responses.

Schachter and Singer

Psychologists who proposed the two-factor theory of emotion, suggesting that emotion comes from a combination of physiological arousal and cognitive labeling of that arousal.

Nucleus Accumbens

A brain structure that plays a central role in the reward circuit, associated with pleasure, reinforcement learning, and addiction.

Limbic System

A complex system of nerves and networks in the brain, involved in basic emotions such as fear and pleasure, and drives like those for food and sex.