Bud Exchanges Land with an Adjusted Basis of $22,000 and a Fair

question 241

Multiple Choice

Bud exchanges land with an adjusted basis of $22,000 and a fair market value of $30,000 for another parcel of land with a fair market value of $28,000 and $2,000 cash. What is Bud's recognized gain or loss?

• A) $0
• B) $2,000
• C) $6,000
• D) $8,000
• E) None of the above

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Definitions:

Market Equilibrium

A market state where the supply of goods matches demand, leading to stable prices.

Unskilled Labor

Workers who lack specialized training or qualifications, often performing manual or simple tasks.

Surplus

The amount by which the quantity supplied of a commodity exceeds the quantity demanded at a specific price.

Minimum Wage

The lowest legal hourly pay that workers can be paid by their employers, set by government policy.