Babex Inc.and OMG Company entered into an exchange of real property.Here is the information for the properties to be exchanged. Pursuant to the exchange,OMG assumed the mortgage on the Babex property.Compute OMG's gain recognized on the exchange and its tax basis in the property received from Babex.
A)$175,000 gain recognized; $514,500 basis in Babex property.
B)No gain recognized; $689,500 basis in Babex property.
C)No gain recognized; $514,500 basis in Babex property.
D)None of the choices are correct.

Question

Babex Inc.and OMG Company entered into an exchange of real property.Here is the information for the properties to be exchanged.  Pursuant to the exchange,OMG assumed the mortgage on the Babex property.Compute OMG's gain recognized on the exchange and its tax basis in the property received from Babex.
A)$175,000 gain recognized; $514,500 basis in Babex property. 
B)No gain recognized; $689,500 basis in Babex property. 
C)No gain recognized; $514,500 basis in Babex property. 
D)None of the choices are correct.

Quizplus · Accepted Answer

The Answer of Babex Inc.and OMG Company entered into an exchange of real property.Here is the information for the properties to be exchanged.  Pursuant to the exchange,OMG assumed the mortgage on the Babex property.Compute OMG's gain recognized on the exchange and its tax basis in the property received from Babex.
A)$175,000 gain recognized; $514,500 basis in Babex property. 
B)No gain recognized; $689,500 basis in Babex property. 
C)No gain recognized; $514,500 basis in Babex property. 
D)None of the choices are correct.

Babex IncAnd OMG Company Entered into an Exchange of Real Property