Question

Landry exchanged land with an adjusted basis of $50,000 for another parcel of land worth $35,000 plus $10,000 of cash. What is the total value of the exchange?

1) $45,000
2) $55,000
3) $60,000
4) $75,000

Answer 1

Landry exchanged land with an adjusted basis of $50,000 for land worth $35,000 plus $10,000 cash. By adding the value of the land received and the cash, the total value of the exchange amounts to $45,000.

Step-by-step explanation:

Calculating the Total Value of a Property Exchange

When Landry exchanged land, two values were combined to establish the total value of the transaction: the value of the land received and the additional cash. The value of the new parcel of land was $35,000, and the cash added was $10,000. To find the total value of the exchange, these two amounts are simply added together.

The calculation is as follows: $35,000 (value of the land received) + $10,000 (cash received) equals $45,000.

Therefore, the correct answer to the question "What is the total value of the exchange?" is:

1. $45,000
2. $55,000
3. $60,000
4. $75,000

The total value of Landry's exchange is $45,000, which corresponds to the first option in the list provided by the question.