Ashley Owns 200 Acres of Farm Land Is Southeastern Virginia

question 33

Multiple Choice

Ashley owns 200 acres of farm land is southeastern Virginia.Her adjusted basis for the land is $525,000 and there is a $390,000 mortgage on the land.She exchanges the land for an office building owned by Chris in Newark,New Jersey.The building has a fair market value of $450,000.Chris assumes Ashley's mortgage on the land.What is the amount of Ashley's recognized gain or loss on the exchange?

• A)$0.
• B)$315,000.
• C)$390,000.
• D)$840,000.
• E)None of the above.

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Definitions:

Utility Function

An economic model representing the preferences of an individual or entity over a set of goods and services by assigning a level of utility to each potential bundle of consumption.

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, demonstrating their preferences.

Apples

A type of fruit that comes in various colors and flavors, widely consumed fresh or used in foods and beverages.

Bananas

Edible fruits produced by various kinds of large herbaceous flowering plants in the genus Musa.