Issue Recognition Problems Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.
ST Inc. and Firm WX are negotiating an exchange of the following business properties:

ST agrees to pay $150,000 cash to WX to equalize the value of the exchange. ST€™s adjusted basis in the office building is $700,000, and WX€™s adjusted basis in the ware-house is $500,000.

Transcribed Image Text:

Office Building (owned by ST) $2,000,000 Warehouse (owned by WX) $1,700,000 FMV Mortgage (450,000)