Alice owns land with an adjusted basis of $305,000, subject to a mortgage of $175,000.On April 1, 2019, Alice sells her land subject to the mortgage for $325,000 in cash, a note for $300,000, and property with a fair market value of $60,000.What is Alice's amount realized on this sale?
A)$685,000.
B)$800,000.
C)$840,000.
D)$860,000.

Question

Quizplus · Accepted Answer

Alice's amount realized is the sum of the cash received, the note, the fair market value of the property received, and the mortgage assumed by the buyer: $325,000 (cash) + $300,000 (note) + $60,000 (property) + $175,000 (mortgage) = $860,000.

Alice Owns Land with an Adjusted Basis of $305,000, Subject