Handout $13\mathrm{.}2$

$2025$ Edition

LIKE$-$KIND EXCHANGE WITH A LIABILITY TRANSFER

Given

Susan owns a high rise office building. Her adjusted basis in the building is $$760,000,$ and she has an outstanding mortgage liability of $$190,000.$ She transfers the high rise office building to Dave in return for a low rise office building with a fair market value of $$780,000,$ and $$120,000$ in cash. Dave's adjusted basis in the low rise office building is $$750,000.$ In addition, Dave assumes the $$190,000$ mortgage liability on the high rise office building.

Do

a$)$ Determine the fair market value of the high rise office building.

b$)$ Determine Susan's realized gain or loss.

c$)$ Determine Susan's recognized gain or loss.

d$)$ Determine Susan's postponed gain or loss.

e$)$ Determine Susan's basis in the newly acquired low rise office building,

f$)$ Determine Dave's realized gain or loss.

g$)$ Determine Dave's recognized gain or loss.

h$)$ Determine Dave's postponed gain or loss.

i$)$ Determine Dave's basis in the newly acquired high rise office building.