Barry Sold depreciable property used in his business to Ken for $172,000 cash plus a bond redeemable in 5 years for $85,000, but currently trading on the NYSE for $78,000. The property cost Barry $320,000 plus $35,000 in capital improvements and had actual accumulated depreciation at the time of sale of $205,000. The amount of accumulated depreciation he should have taken was $180,000.

1. What is the amount realized on the sale of the depreciable property?

a. $100,000

b. $250,000

c. $85,000

d. $257,000

e. $355,000

2. What is the adjusted basis of the property at the time of the sale?

a. $320,000

b. $175,000

c. $115,000

d. $150,000

e. None of the above

3. What is the recognized gain or loss?

1. $70,000 Loss
2. $75,000 Gain
3. $100,000 Gain
4. $22,000 Gain
5. None of the above