Steve Stromm Transfers an Office Building with an Adjusted Basis

question 70

Essay

Steve Stromm transfers an office building with an adjusted basis of $200,000 and a fair market value of $300,000 for Andrew Astor's office building (adjusted basis $190,000) with a fair market value of $250,000. Steve's mortgage of $120,000 is assumed by Andrew whose mortgage of $70,000 is assumed by Steve. What is the realized and recognized gain or loss for Steve and Andrew and what are their bases in their acquired buildings?

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