Babex Inc and OMG Company Entered into an Exchange of Real

question 57

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 above.

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Definitions:

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A specific depiction of Christ in Christian iconography, representing him as the all-powerful ruler of the universe, often seen in Byzantine art.

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A town in Sicily, Italy, known for its Norman cathedral, which features extensive mosaics and is a masterpiece of Norman architecture.