5. Mary owns an apartment building that has an adjusted basis of $1,080,000 but subject to a mortgage of $320,000. Mary transfers the apartment building to Gary, and receives from Gary $230,000 in cash and an office building with a fair market value of $880,000 at the time of the exchange. Gary assumes the $320,000 mortgage on the apartment. The transfer is a like-kind exchange.

a) what is Marys realized gain/ loss?

b) what is Mary recognized gain/loss?

c) what is Marys basis of the newly acquired office building?

6. Cindy sold her GE stock to her brother Jeff for $1,200. She bought the stocks for $1,500.

a. How much is Cindys deductible loss?

b. later, Jeff sold the stock to the third unrelated party for $1,500. What is Jeffs gain or loss?

c. If Jeff sold the stock to the third unrelated party for $1,000, what is Jeffs gain or loss?

7. Maria, who is single, had the following items for the tax year:

Salary $80,000

Loss on sale of 1244 small business stock acquired 3 years ago (60,000)

Stock acquired 2 years ago became worthless during the year (5,000)

Long-term capital gain 25,000

Nonbusiness bad debt (15,000)

Determine Marias adjusted gross income:.