Rachelle owned land with a basis of $200,000, subject to a mortgage of $125,000. She exchanged the land held for another parcel of land with a fair market value of $375,000 plus cash of $50,000, and the she was relieved of the mortgage on the relinquished land. The transaction qualified for like-kind exchange treatment. What amount of taxable gain will be recognized on Rachelle’s tax return for this exchange? $50,000 $175,000 $230,000 $550,000
Rachelle owned land with a basis of $200,000, subject to a mortgage of $125,000. She exchanged the land held for another parcel of land with a fair market value of $375,000 plus cash of $50,000, and the she was relieved of the mortgage on the relinquished land. The transaction qualified for like-kind exchange treatment. What amount of taxable gain will be recognized on Rachelle’s tax return for this exchange? $50,000 $175,000 $230,000 $550,000
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 40P
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Rachelle owned land with a basis of $200,000, subject to a mortgage of $125,000. She exchanged the land held for another parcel of land with a fair market value of $375,000 plus cash of $50,000, and the she was relieved of the mortgage on the relinquished land. The transaction qualified for like-kind exchange treatment. What amount of taxable gain will be recognized on Rachelle’s tax return for this exchange?
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$50,000
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$175,000
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$230,000
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$550,000
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