Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV) of stock owned by Hayden. Hayden takes the land subject to the liability. Jack incurs $500 of selling expenses. What is the amount of Jack's realized gain on the exchange?

Question

Quizplus · Accepted Answer

The realized gain is calculated as the difference between the FMV of the stock received and the adjusted basis of the land exchanged, minus the selling expenses. In this case, the realized gain is $50,000 - $65,000 - $500 = $6,500.

Jack Exchanged Land with an Adjusted Basis of $65,000 Subject