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 C&K's gain recognized on the exchange and its tax basis in the property received from Johnson.
A)$200,000 gain recognized; $662,000 basis in Johnson property.
B)No gain recognized; $462,000 basis in Johnson property.
C)No gain recognized; $487,000 basis in Johnson 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 C&K's gain recognized on the exchange and its tax basis in the property received from Johnson.
A)$200,000 gain recognized; $662,000 basis in Johnson property. 
B)No gain recognized; $462,000 basis in Johnson property. 
C)No gain recognized; $487,000 basis in Johnson 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 C&K's gain recognized on the exchange and its tax basis in the property received from Johnson.
A)$200,000 gain recognized; $662,000 basis in Johnson property. 
B)No gain recognized; $462,000 basis in Johnson property. 
C)No gain recognized; $487,000 basis in Johnson property. 
D)None of the choices are correct.