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:

Aposthia

A rare congenital condition in which an individual is born without a foreskin.

Androgen Insensitivity Syndrome

A genetic condition where a person who is genetically male (XY chromosomes) is resistant to male hormones (androgens), leading to the development of female physical traits but male genetic makeup.

Congenital Adrenal Hyperplasia

is a genetic disorder that affects the adrenal glands, leading to a disruption in hormone production and potentially affecting sexual development.

Klinefelter Syndrome

A genetic condition affecting males, characterized by an extra X chromosome, leading to symptoms such as reduced fertility, gynecomastia, and small testes.