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?

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Definitions:

Conflict of Interest

A situation in which a person's personal interest might influence their professional judgment or actions, often leading to a potential for bias.

Conflicts Check

A procedure for determining whether an agreement to represent a potential client will result in a conflict of interest.

Potential Client

An individual or entity that may consider using the services of a professional, such as a lawyer, but has not yet committed to doing so.

Unauthorized Practice of Law

The act of providing legal advice or representation by someone not licensed to practice law in a jurisdiction.