Babex Inc and OMG Company Entered into an Exchange of Real

question 88

Multiple Choice

Babex Inc. and OMG Company entered into an exchange of real property. Here is the information for the properties to be exchanged.
Pursuant to the exchange, OMG assumed the mortgage on the Babex property.
-Compute Babex's gain recognized on the exchange and its tax basis in the property received from OMG.

• A) $175,000 gain recognized; $768,000 basis in OMG property.
• B) No gain recognized; $768,000 basis in OMG property.
• C) $175,000 gain recognized; $943,000 basis in OMG property.
• D) None of the choices are correct.

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Definitions:

Acid Base

Refers to the mechanisms the body uses to maintain its pH within the narrow range necessary for various bodily functions to operate optimally.

Nucleoplasm

The semi-fluid substance inside the nucleus of a cell, containing the chromatin and the nucleolus.

Semifluid Medium

A substance that has properties between solid and liquid states, often used in biological and chemical applications for cultures or reactions.

Chromatin

A complex of DNA and proteins found in the nucleus of cells that condenses to form chromosomes during cell division.