Question 1

Jack owns an office building in Los Angeles with a FMV of $850,000 and adjusted basis of $50,000. Jill owns an office building in Philadelphia with a FMV of $750,000 and adjusted basis of $150,000. Jill also owns stock with a FMV of $100,000 and adjusted basis of $20,000.

Jack and Jill enter into an exchange transaction. Jack transfers his building to Jill and Jill transfers her building and stock to Jack.

Compute Jack and Jills realization and recognition of gains and the basis in the like-kind property each receives from the other