Elizabeth exchanges an office building valued at $400,000 with a $75,000 mortgage and adjusted basis of $180,000 for land valued at $275,000.What is Elizabeth's basis in the land received in the exchange?

Question

Quizplus · Accepted Answer

Elizabeth's basis in the land received is equal to her adjusted basis in the office building she gave up, which is $180,000. In a like-kind exchange, the basis of the property given up is transferred to the property received, adjusted for any additional money paid or received.

Elizabeth Exchanges an Office Building Valued at $400,000 with a $75,000