Matthew Exchanges an Investment Apartment Building for a Parcel of Land

question 84

Short Answer

Matthew exchanges an investment apartment building for a parcel of land. The apartment building has a fair market value of $80,000 and an adjusted basis of $95,000. The land's value is $60,000. Matthew receives $20,000 cash in the exchange. What is Matthew's recognized gain or (loss) on the exchange and his basis in the land?
?
$\begin{array} { c c } \text { Gain (Loss) Recognized } & \text { Basis } \\\end{array}$
A) $\begin{array} { c c } &\$ - 0 - &&&&&& \$ 75,000 \\\end{array}$
B) $\begin{array} { c c } &\$ ( 15,000 ) &&&&&& \$ 65,000 \\\end{array}$
C) $\begin{array} { c c } &\$ ( 35,000 ) &&&&&& \$ 85,000 \\\end{array}$
D) $\begin{array} { c c } &\$ 20,000 &&&&&& \$ 30,000 \\\end{array}$
E) $\begin{array} { c c } & \$ 15,000 &&&&&& \$ 35,000\end{array}$

• A) \(\begin{array} { c c } &\$ - 0 - &&&&&& \$ 75,000 \\\end{array}\)
• B) \(\begin{array} { c c } &\$ ( 15,000 ) &&&&&& \$ 65,000 \\\end{array}\)
• C) \(\begin{array} { c c } &\$ ( 35,000 ) &&&&&& \$ 85,000 \\\end{array}\)
• D) \(\begin{array} { c c } &\$ 20,000 &&&&&& \$ 30,000 \\\end{array}\)
• E)\(\begin{array} { c c } & \$ 15,000 &&&&&& \$ 35,000
• \end{array}\)

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Definitions:

Square Meters

A unit of area measurement in the metric system, used to quantify the size of an area, equal to the area of a square with sides that are one meter in length.

Square Centimeters

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Depakene Syrup

A liquid form of the medication valproic acid, used primarily to treat seizure disorders, bipolar disorder, and to prevent migraine headaches.

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A unit of measurement indicating milligrams of a substance per kilogram of body weight per day, often used in medical dosing.