Problem 8-20 Like-Kind Exchanges (LO 8.11)

Carey exchanges real estate for other real estate in a qualifying like-kind exchange. Carey's basis in the real estate given up is $120,000, and the property has a fair market value of $165,000. In exchange for her property, Carey receives real estate with a fair market value of $100,000 and cash of $15,000. In addition, the other party to the exchange assumes a mortgage loan on Carey's property of $50,000.

a. Calculate Carey's recognized gain, if any, on the exchange. $

b. Calculate Carey's basis in the property received. $