Jason Owns a Warehouse That Is Used in Business

question 28

Multiple Choice

Jason owns a warehouse that is used in business.The FMV of the warehouse is $200,000 (basis $120,000) ,and the warehouse is subject to a mortgage of $40,000.Jason exchanges the warehouse for land valued at $150,000.The other party also pays him $10,000 cash and assumes the mortgage on the warehouse.Jason's basis in the land received will be

• A)$120,000.
• B)$150,000.
• C)$180,000.
• D)$200,000.

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Definitions:

Risk Management

The practice of identifying, assessing, and controlling threats to an organization's capital and earnings.

Holding Period

The duration of time an investment is held before it is sold or disposed of, impacting the tax treatment of any profits or losses.

Seed Stage

An early phase of a startup's lifecycle where the focus is on product development and initial market research, often funded by seed capital.

Capital Commitments

Obligations of a company to spend capital in the future for the purchase of assets or for investment purposes.