Justin Trades an Office Building Located in Michigan to John

question 84

Short Answer

Justin trades an office building located in Michigan to John for an apartment complex located in North Carolina.Details of the two properties:
$\begin{array}{lrr}&\text { Justin } & \text { John } \\&\text { Michigan } & \text { N. Carolina }\\\text { Fair market value } & \$ 9,000,000 & \$ 4,000,000 \\\text { Adjusted basis } & 3,000,000 & 3,000,000 \\\text { Liabilities transferred with property } & 2,000,000 & -0 \text { - }\end{array}$
In addition,John pays Justin $3,000,000 cash as part of this transaction.What is the gain (loss)recognized by John in this transaction and what is his basis in the Michigan property?
$\begin{array}{lc}\text { Gain Recognized } & \text { Adjusted B asis } \\\text { a. } \$ 1,000,000 & \$ 9,000,000 \\\text { b. } \$-0- & \$ 8,000,000 \\\text { c. } \$ 1,000,000 & \$ 6,000,000 \\\text { d. } \$-20- & \$ 9,000,000\end{array}$
$\text { e. Some other amounts }$

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Definitions:

Voyeurism

A paraphilic disorder characterized by gaining sexual pleasure from observing unsuspecting individuals who are naked, in the process of disrobing, or engaging in sexual activity.

Unsuspecting Person

An individual who is unaware or naive about a certain situation, often making them an easy target for deception or harm.

Sexual Pleasure

The enjoyable and satisfying feelings derived from sexual activities.

Frotteurism

A paraphilic interest characterized by a person's sexual arousal from rubbing against a non-consenting person, typically in crowded public places.