Kevin Exchanges an Office Building Used in His Business for Another

question 89

Essay

Kevin exchanges an office building used in his business for another office building worth $200,000 plus $30,000 cash.The FMV of Kevin's old building is $280,000 (basis $150,000)and it is subject to a mortgage of $50,000.The mortgage is assumed by the other party.
a.What is the amount of gain realized by Kevin?
b.What is the amount of gain recognized by Kevin?
c.What is the basis of the new building to Kevin?

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Definitions:

Rigid Behavior

A type of behavior characterized by an unwillingness or inability to change or adapt to new situations, ideas, or environments.

DSM

Diagnostic and Statistical Manual of Mental Disorders, a publication that categorizes and defines mental health disorders.

Psychological Professionals

Individuals with specialized training in the study of the mind and behavior, including psychologists, psychiatrists, and psychotherapists.

Psychological Disorders

Disturbances in an individual's cognition, emotion regulation, or behavior, reflecting dysfunction in psychological, biological, or developmental processes.