Eleanor exchanged Lakefront land held for investment for a parcel Mountaintop land. Eleanor intends to hold the Mountaintop land for investment as well. Eleanor's basis in the Lakefront property is $40,000. It is subject to a mortgage of $60,000 (which the acquirer, Fenton, assumes).

In order to obtain Eleanor's property, Fenton transferred the Mountaintop property (worth $100,000). The Mountaintop property was subject to a mortgage of $30,000. Fenton's basis in the property was $110,000. In addition, Fenton transferred stock with a fair value of $25,000 (basis of $18,000). Fenton held the Mountaintop property for business, but intends to hold the Lakefront property for investment.