Jane owns a building for investment with an adjusted basis of $340,000 and a fair...
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Jane owns a building for investment with an adjusted basis of $340,000 and a fair market value of $750,000. She exchanges the building for a building owned by Sue that Jane will use in her business. Sues building has a fair market value of $950,000 and is subject to a $200,000 liability. Jane assumes Sues liability and uses the building in her business. How much, if any, is Janes realized gain, recognized gain, and basis in the building received?
a. Gain realized of $610,000, gain recognized of 0, and basis in new building of $340,000.
b. Gain realized of $610,000, gain recognized of $610,000, and basis in new building of $750,000.
c. Gain realized of $410,000, gain recognized of 0, and basis in building of $540,000.
d. Gain realized of $410,000, gain recognized of $410,000, and basis of $750,000.
My answer I come up with is (c)Gain realized of $410,000, gain recognized of 0, and basis in building of $540,000.
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