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

question 34

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

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Definitions:

Exciter Ring

Preferred term by one OEM for the toothed reluctor used in a wheel speed sensor.

Tone Wheel

Tone wheel, in automotive contexts, refers to a component that works with sensors to monitor the speed of rotating parts like the wheels or crankshaft, generating a signal that varies with speed.

Electrical Principle

Fundamental laws or concepts in electricity, such as Ohm's law, which govern the behavior and operation of electrical systems and components.

Wheel Speed Sensor

Reluctor-type electromagnetic device used to signal wheel speed data to an antilock controller. Consists of a permanent magnet and toothed reluctor. As the reluctor wheel cuts through a magnetic field, AC is generated and a frequency signal produced.