Question
Bob owns a warehouse that is used in business while Rebecca owns land. Bob exchanges the warehouse for the land, which will be held for
Bob owns a warehouse that is used in business while Rebecca owns land. Bob exchanges the warehouse for the land, which will be held for investment. The FMV of the warehouse is $440,000 (basis $240,000) and the warehouse is subject to a mortgage of $80,000, which is assumed by Rebecca. Bob receives $40,000 cash and the land, which has a FMV of $320,000 (basis of $260,000 to Rebecca).What are the amount realized, the amount of gain recognized by Bob, and Bob's new basis in the land received?
Amount realized | Gain realized | Gain recognized | Basis of property |
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