Essay
In the current year, Penny exchanges an investment property in Santa Barbara with a mountain view for a lot with an ocean view in a qualifying like-kind exchange. Penny's basis in the land given up is $100,000 and the property has a fair market value of $250,000. In exchange for her property, Penny receives land with a fair market value of $200,000 and cash of $20,000. In addition, the other party to the exchange assumes a mortgage loan on Penny's property of $30,000.
a.Calculate Penny's realized gain, if any, on the exchange.
b.Calculate Penny's recognized gain, if any, on the exchange.
c.Calculate Penny's basis in the property received.
Correct Answer:
Verified
Correct Answer:
Verified
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