Question

Julie transferred a building with an adjusted basis of $240,000 for another building with a fair market value of $350,000 and $25,000 in cash. The exchange qualified as a like-kind exchange. The realized gain on the exchange was $

Answer 1

$135,000

Step-by-step explanation:

The realized gain can be calculated as under:

Realized Gain = Market Value received - Adjusted Basis

Here

Market Value received is $375,000 (350k + 25k)

Adjusted Basis $240,000

By putting values, we have:

Realized Gain = $375,000 - $240,000 = $135,000