Mikhail owns real estate with a basis of $400,000 and a fair market value of650,000. He exchanges it for other real estate with a fair market value of $480,000.In addition, Mikhail is relieved of a mortgage on the old property of $200,000,assumes a mortgage on the new property of $100,000, and receives $70,000 in cash.Under Code Section 1031, what is Mikhail’s recognized gain on the exchange?
a. $170,000
b. $270,000
c. $70,000
d. $350,000