Charla owns land used in he exchange the land for a ware and a fair market value of $11
Charla owns land used in he exchange the land for a ware and a fair market value of $11
Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law
Section: Chapter Questions
Problem 49DQ
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Question
Transcribed Image Text:Charla owns land used in her business with a basis of $70,000 and a fair market value of $100,000. She is planning to
exchange the land for a warehouse owned by Jim and used in his business. Jim's warehouse has a basis of $50,000
and a fair market value of $150,000. The warehouse is also subject to a liability of $50,000. Charla has agreed to
assume the liability for Jim.
Requirement
What is Jim's recognized gain and his basis in the new land?
****
Begin by calculating the realized gain.
First identify the formula, then enter the applicable amounts and calculate the realized gain.
Realized gain
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