Mr. Weller and the Olson Partnership entered into an exchange of investment real property. Mr. Weller's property was subject to a $428,000 mortgage, which Olson assumed. Olson's property was subject to a $235,000 mortgage, which Mr. Weller assumed. Which of the following statements is true?
A) Mr. Weller received $193,000 boot; Olson paid $193,000 boot.
B) Mr. Weller paid $193,000 boot; Olson received $193,000 boot.
C) Mr. Weller received $428,000 boot; Olson received $235,000 boot.
D) Mr. Weller paid $428,000 boot; Olson paid $235,000 boot.

Question

Quizplus · Accepted Answer

Mr. Weller received $193,000 boot because the difference between the mortgage Olson assumed ($428,000) and the mortgage Mr. Weller assumed ($235,000) is $193,000. Olson paid $193,000 boot as a result of assuming the higher mortgage.

Mr Weller and the Olson Partnership Entered into an Exchange