Question
Alice owns land with an adjusted basis of $610,000 subject to a mortgage of $350,000. On April 1, Alice sells her land to Marcia $650,000
Alice owns land with an adjusted basis of $610,000 subject to a mortgage of $350,000. On April 1, Alice sells her land to Marcia $650,000 in cash, a note for $600,000, and property with a fair market value of $120,000. Marcia assumes Alices mortgage of $350,000. The amount realized is $1,720,000.
11. What is Alices adjusted basis at the time of the sale?
| a. $0 | ||
| b. $260,000 | ||
| c. $610,000 | ||
| d. $960,000 |
12. What is Alices gain or loss realized from the sale?
| a. $0 gain or loss realized | ||
| b. $610,000 gain realized | ||
| c. $760,000 gain realized | ||
| d. $1,110,000 gain realized |
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