Ask Question
28 June, 22:38

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.

+1
Answers (1)
  1. 28 June, 22:47
    0
    a. $45,000

    b. $100,000

    Explanation:

    The computations are shown below:

    a. Recognized gain would be

    = Fair market value of real estate + cash received + mortgage loan - Carey's basis in the real estate given up

    = $100,000 + $15,000 + $50,000 - $120,000

    = $45,000

    b. For property received:

    = Carey's basis in the real estate given up - cash received - mortgage loan + recognized gain

    = $120,000 - $15,000 - $50,000 + $45,000

    = $100,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Carey exchanges real estate for other real estate in a qualifying like-kind exchange. Carey's basis in the real estate given up is ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers