Summer Exchanges an Office Building Used in Her Business for Another

question 115

Essay

Summer exchanges an office building used in her business for another office building.Summer's office building has a FMV of $250,000 (basis of $180,000).The FMV of the new building is $300,000,and it is subject to a mortgage of $60,000,which is assumed by Summer.Summer also pays the other party $40,000 cash.
a.What is the amount of gain realized by Summer?
b.What is the amount of gain recognized by Summer?
c.What is the basis of the new building to Summer?

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Definitions:

Lubrication Records

Documentation kept to track the lubrication schedules, types of lubricants used, and maintenance performed on machinery to ensure optimal performance and longevity.

Maintenance Records

Documents that keep track of all the repair, maintenance, and service activities performed on a machine or equipment.

Leg Muscles

Refers to the group of muscles located in the thigh and lower leg that are responsible for movements such as extension, flexion, and rotation of the leg.

Class B

A classification for airspace that typically surrounds the busiest airports, requiring aircraft to obtain air traffic control clearance for entry.