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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Definitions:

Royal Presence

The physical or symbolic presence of royalty in a place or event, often signifying power, authority, or divine right.

Artwork Material

The substance or substances used in the creation of a work of art, such as paint, marble, bronze, or digital media.

Ivory

A hard, white material from the tusks (mainly elephants') and teeth of animals, used historically for art, decoration, and utilitarian items.

Plaster

A material usually made from water, gypsum, or lime, used in building and art for coating, decorating, and molding smooth, hard surfaces.