Johnson Inc

question 57

Multiple Choice

Johnson Inc. and C&K Company entered into an exchange of real property. Here is the information for the properties to be exchanged.
Pursuant to the exchange, C&K paid $25,000 cash to Johnson and assumed the mortgage on the Johnson property.
-Compute Johnson's gain recognized on the exchange and its tax basis in the property received from C&K.

• A) $25,000 gain recognized; $593,000 basis in C&K property.
• B) $25,000 gain recognized; $793,000 basis in C&K property.
• C) $225,000 gain recognized; $593,000 basis in C&K property.
• D) None of the choices are correct.

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Definitions:

Dismissed Executives

Senior employees who have been removed from their positions within a company, often due to performance issues, restructuring, or changes in strategic direction.

Lag The Market

A compensation strategy where an organization deliberately sets wage levels below the average market rate, often due to financial constraints or strategic choice.

Compensation Strategy

A plan established by an organization to determine how to reward employees effectively, taking into account salaries, benefits, bonuses, and other forms of compensation.

Turnover Costs

Expenses related to replacing employees who leave the organization, including recruitment, training, and lost productivity.