1.( T or F ) N&B Inc. holds land with a tax basis of $100,000. In selling the land, the purchaser paid $80,000 cash, gave N&B Inc. a car worth $50,000 and assumed N&B Inc.'s $255,000 mortgage on the land. N&B's gain on the sale was $285,000.

2. ( T or F ) Mr. Jason realized a $500,000 gain on the sale of the building portion of a residential apartment complex that he had placed in service in 1993. Accumulated depreciation on the sold building was $311,800. The $188,200 gain is characterized as Section 1231 gain and is taxed at 20%.