Stanley and Helen Roper, married individuals, own the Highland Apartments building. Their adjusted basis in the building is $75,000 and the building secures a mortgage in the amount of $120,000. The building was condemned by the state to make room for a new thoroughfare. Stanley and Helen received $225,000 from the state as just compensation, with $120,000 of that amount payable directly to the mortgagee. Within a year of having the Highland Apartments condemned, Stanley and Helen purchased another apartment building, the Mindure Manor, worth $210,000. The couple paid $60,000 cash and assumed an existing mortgage of $150,000 to finance the purchase.

(a) What are the federal income tax consequences of these events to Stanley and Helen?

(b) How would the answer to (a) change if the Mindure Manner was a nursing home facility and not an apartment building?