On October 1, Paula Exchanged an Apartment Building (Adjusted Basis

question 30

Multiple Choice

On October 1, Paula exchanged an apartment building (adjusted basis of $375,000 and subject to a mortgage of $125,000) for another apartment building owned by Nick (fair market value of $550,000 and subject to a mortgage of $125,000) . The property transfers were made subject to the mortgages. What amount of gain should Paula recognize?

• A) $0
• B) $25,000
• C) $125,000
• D) $175,000
• E) None of the above

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Definitions:

Ecdysone

See molting hormone.

Juvenile Hormone

An insect hormone that regulates development, reproduction, and other physiological functions, preventing the development into an adult.

Insect Growth

Insect growth encompasses the developmental stages an insect undergoes from egg to adulthood, influenced by factors like nutrition and environmental conditions.

Molting

The shedding and replacement of an outer covering such as an exoskeleton.