Babex Inc and OMG Company Entered into an Exchange of Real

question 102

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 OMG's gain recognized on the exchange and its tax basis in the property received from Babex.

• A) $175,000 gain recognized; $514,500 basis in Babex property.
• B) No gain recognized; $689,500 basis in Babex property.
• C) No gain recognized; $514,500 basis in Babex property.
• D) None of the choices are correct.

---

Definitions:

Medulla

An area in the brainstem responsible for controlling autonomic functions such as breathing, heart rate, and blood pressure.

Breathe

The process of inhaling and exhaling air to facilitate gas exchange within the lungs.

Metabolize Food

The biochemical process by which organisms convert food into energy and other substances necessary for life.

Occipital Lobe

The region located at the back of the brain that is responsible for processing visual information.