Brian owns a duplex used as rental property. The duplex has a basis of $84,000...
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Accounting
Brian owns a duplex used as rental property. The duplex has a basis of $84,000 and $380,000 FMV. He transfers the duplex to Carrie, his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange,Carrie sells the duplex to a business associate for $395,000.
Requirements
Determine:
| a. | Brian's realized and recognized gain on the exchange. |
| b. | Carrie's realized and recognized gain on the exchange. |
Requirement a. Determine Brian's realized and recognized gain on the exchange.
Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain.
|
| Amount realized (Brian) | - | Adjusted basis (duplex) | = | Realized gain |
| $380,000 | - | $84,000 | = | $296,000 |
Determine
Brian's recognized gain on the exchange.
| The recognized gain is $ |
| . |
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