On October 1, Paula Exchanged an Apartment Building (Adjusted Basis

question 30

Multiple Choice

On October 1, Paula exchanged an apartment building (adjusted basis of $375,000 and subject to a mortgage of $125,000) for another apartment building owned by Nick (fair market value of $550,000 and subject to a mortgage of $125,000) . The property transfers were made subject to the mortgages. What amount of gain should Paula recognize?

• A) $0
• B) $25,000
• C) $125,000
• D) $175,000
• E) None of the above

---

Definitions:

Presbycusis

Age-related hearing loss, which progressively affects the ability to hear higher frequencies over time.

Hearing Loss

A partial or total inability to hear, which can be temporary or permanent, affecting one or both ears.

Meniere's Disease

A disorder of the inner ear that can lead to dizzy spells (vertigo) and hearing loss.

Sensory Deprivation

A condition in which one or more of the senses is reduced or eliminated, either as a therapeutic technique or as a result of environmental factors.