Alice Owns Land with an Adjusted Basis of $610,000,subject to a Mortgage

question 26

Multiple Choice

Alice owns land with an adjusted basis of $610,000,subject to a mortgage of $350,000.Real estate taxes are $9,000 per calendar year and are payable on December 31.On April 1,Alice sells her land subject to the mortgage for $650,000 in cash,a note for $600,000,and property with a fair market value of $120,000.What is the amount realized?

• A)$1,370,000
• B)$1,372,250
• C)$1,720,000
• D)$1,722,250
• E)None of the above

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Definitions:

Rawlsian

Pertaining to the philosophical ideas of John Rawls, especially his theory of justice which emphasizes fairness and the "veil of ignorance" principle in ethical decision making.

Utilitarian

A philosophical theory that suggests an action is right if it leads to the greatest happiness for the greatest number of people.

Paternalism

The practice or policy of limiting someone's freedom or making decisions for them in their supposed best interest.