Pam Exchanges a Rental Building, Which Has an Adjusted Basis

question 179

Multiple Choice

Pam exchanges a rental building, which has an adjusted basis of $520,000, for investment land which has a fair market value of $700,000. In addition, Pam receives $100,000 in cash. What is the recognized gain or loss and the basis of the investment land?

• A) $0 and $420,000.
• B) $100,000 and $420,000.
• C) $100,000 and $520,000.
• D) $280,000 and $700,000.
• E) None of the above.

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