Pam Exchanges a Rental Building, Which Has an Adjusted Basis

question 20

Multiple Choice

Pam exchanges a rental building, which has an adjusted basis of $520,000, for investment land which has a fair market value of $700,000.In addition, Pam receives $100,000 in cash.What is the recognized gain or loss and the basis of the investment land?

• A)$0 and $420,000.
• B)$100,000 and $420,000.
• C)$100,000 and $520,000.
• D)$280,000 and $700,000.

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Definitions:

Midlife Adults

Individuals in the middle of their lifespan, generally considered to be between the ages of about 40 and 65, often experiencing transition and evaluation of life accomplishments.

Crystallized Intelligence

Intellectual ability that reflects accumulated knowledge acquired through experience and learning.

Intelligence

The capacity for learning, understanding, and applying knowledge and skills, often measured through IQ or other cognitive assessments.

Cognitive Development

The process by which individuals gain and enhance their ability to think, learn, and solve problems over time.