Johnson Inc.and C&K Company entered into an exchange of real property.Here is the information for the properties to be exchanged. Pursuant to the exchange,C&K paid $25,000 cash to Johnson and assumed the mortgage on the Johnson property.Compute Johnson's gain recognized on the exchange and its tax basis in the property received from C&K.
A)$25,000 gain recognized; $593,000 basis in C&K property.
B)$25,000 gain recognized; $793,000 basis in C&K property.
C)$225,000 gain recognized; $593,000 basis in C&K property.
D)None of the choices are correct.

Question

Johnson Inc.and C&K Company entered into an exchange of real property.Here is the information for the properties to be exchanged.  Pursuant to the exchange,C&K paid $25,000 cash to Johnson and assumed the mortgage on the Johnson property.Compute Johnson's gain recognized on the exchange and its tax basis in the property received from C&K.
A)$25,000 gain recognized; $593,000 basis in C&K property. 
B)$25,000 gain recognized; $793,000 basis in C&K property. 
C)$225,000 gain recognized; $593,000 basis in C&K property. 
D)None of the choices are correct.

Quizplus · Accepted Answer

The Answer of Johnson Inc.and C&K Company entered into an exchange of real property.Here is the information for the properties to be exchanged.  Pursuant to the exchange,C&K paid $25,000 cash to Johnson and assumed the mortgage on the Johnson property.Compute Johnson's gain recognized on the exchange and its tax basis in the property received from C&K.
A)$25,000 gain recognized; $593,000 basis in C&K property. 
B)$25,000 gain recognized; $793,000 basis in C&K property. 
C)$225,000 gain recognized; $593,000 basis in C&K property. 
D)None of the choices are correct.