Perry Inc and Dally Company Entered into an Exchange of Real

question 95

Multiple Choice

Perry Inc. and Dally Company entered into an exchange of real property. Here is the information for the properties to be exchanged. $\begin{array}{lccc} & \text { Perry } & \text { Dally } \\\text { FMV } & \$ 500,000 & \$ 530,000 \\\text { Adjusted tax basis } & 410,000 & 283,000 \\\text { Mortgage } & 70,000 & 100,000\end{array}$ Pursuant to the exchange, Perry assumed the mortgage on the Dally property, and Dally assumed the mortgage on the Perry property. Compute Perry's gain recognized on the exchange and its tax basis in the property received from Dally.

• A) No gain recognized; $410,000 basis in the Dally property.
• B) No gain recognized; $440,000 basis in the Dally property.
• C) $100,000 gain recognized; $410,000 basis in the Dally property.
• D) None of these choices are correct.

---

Definitions:

Electronic Billboards

Digital advertising structures that display dynamic or static messages and images, commonly used for marketing in high-traffic areas.

Corporate Tail Spend

The small amount of spend that accounts for a majority of an organization's transactions but a minority of its overall spend, often unmanaged or undermanaged.

Business Supply Spending

Expenditure by businesses on the procurement of goods and services necessary for their operations, including office supplies, machinery, and software.

Core Corporate Functions

Essential activities or operations critical to the management and sustained success of a corporation, such as finance, human resources, and marketing.