Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 30

Janel exchanges a building she uses in her rental business for a building owned by Russel that she will use in her rental business. The adjusted basis of Janel's building is $160,000, and the fair market value is $250,000. The adjusted basis of Russel's building is $80,000, and the fair market value is $250,000. Which of the following statements is correct? a. Janel's recognized gain is $0, and her basis for the building received is $160,000.
B) Janel's recognized gain is $90,000, and her basis for the building received is $160,000.
C) Janel's recognized gain is $0, and her basis for the building received is $250,000.
D) Janel's recognized gain is $90,000, and her basis for the building received is $250,000.