Lily Exchanges a Building She Uses in Her Rental Business

question 64

Multiple Choice

Lily exchanges a building she uses in her rental business for a building owned by Kendall.She will use the building in her rental business.The adjusted basis of Lily's building is $120,000 and the fair market value is $170,000.Which of the following statements is correct?

• A)Lily's recognized gain is $50,000 and her basis for the building received is $120,000.
• B)Lily's recognized gain is $50,000 and her basis for the building received is $170,000.
• C)Lily's recognized gain is $0 and her basis for the building received is $120,000.
• D)Lily's recognized gain is $0 and her basis for the building received is $170,000.

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