Lyle Lawrence transfers an apartment building with an adjusted basis of $300,000 and a fair market value of
$480,000 for Carl Cushions apartment building (adjusted basis $280,000) with a fair market value of $400,000. Lyle's mortgage of $120,000 is assumed by Carl, whose mortgage of $40,000 is assumed by Lyle. What is the realized and recognized gain or loss for Lyle and Carl, and what are their bases in their acquired buildings?

Question

Quizplus · Accepted Answer

The Answer of Lyle Lawrence transfers an apartment building with an adjusted basis of $300,000 and a fair market value of
$480,000 for Carl Cushions apartment building (adjusted basis $280,000) with a fair market value of $400,000. Lyle's mortgage of $120,000 is assumed by Carl, whose mortgage of $40,000 is assumed by Lyle. What is the realized and recognized gain or loss for Lyle and Carl, and what are their bases in their acquired buildings?

Lyle Lawrence Transfers an Apartment Building with an Adjusted Basis