Description
Bubba exchanges a warehouse for a building she will use as an office building. The adjusted basis of the warehouse is $600,000, and the fair market value of the office building is $350,000. In addition, the taxpayer receives cash of $150,000. What is the recognized gain or loss and the basis of the office building?
Explanation & Answer
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Recognized Gain / (loss) = Value Assets Received - Value Assets Given
=(350000+150000) � 600000
= -100000
Hence there is recognized loss of $100000
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