James corporation exchanges a building (fair market value = $800,000, adjusted basis = $600,000) that has a $100,000 mortgage for another building owned by Pete Corporation (fair market value = $1,100,000, adjusted basis = $600,000) that is encumbered by a $400,000 mortgage.Each party assumed the mortgage on the building received.What are James's and Pete's recognized gains on the exchange, respectively?
A)0, 0
B)0, $300,000
C)$100,000, 0
D)$100,000, $400,000

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The Answer of James corporation exchanges a building (fair market value = $800,000, adjusted basis = $600,000) that has a $100,000 mortgage for another building owned by Pete Corporation (fair market value = $1,100,000, adjusted basis = $600,000) that is encumbered by a $400,000 mortgage.Each party assumed the mortgage on the building received.What are James's and Pete's recognized gains on the exchange, respectively?
A)0, 0
B)0, $300,000
C)$100,000, 0
D)$100,000, $400,000

James Corporation Exchanges a Building (Fair Market Value = $800,000