Latisha Owns a Warehouse with an Adjusted Basis of $112,000

question 179

Multiple Choice

Latisha owns a warehouse with an adjusted basis of $112,000.She exchanges it for a strip mall building worth $150,000.Which of the following statements is correct?

• A)If the warehouse was used in Latisha's business to store inventory and the strip mall building is to be rented to tenants, her recognized gain is $38,000 and her basis for the strip mall building is $150,000.
• B)If the warehouse was used in Latisha's business to store inventory and the strip mall building is to be used as a retail outlet for her business, her recognized gain is $0 and her basis for the strip mall building is $112,000.
• C)If the warehouse is used by Latisha to store personal use items such as excess furniture and the strip mall building is to be rented to tenants, her recognized gain is $38,000 and her basis for the strip mall building is $150,000.
• D)Only b.and c.are correct.
• E)a., b., and c.are correct.

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