Mr. Bentley exchanged investment land subject to a $300,000 mortgage for commercial real estate subject to a $188,000 mortgage. Mr. Bentley is treated as paying $112,000 boot in the exchange.

Question

Quizplus · Accepted Answer

The amount of boot paid in the exchange would be calculated as the fair market value of the property received minus the amount of debt assumed. In this case, we would need to know the fair market value of both properties to determine if boot was paid, and if so, how much. Without this information, we cannot determine the accuracy of the statement.

Mr Bentley Exchanged Investment Land Subject to a $300,000 Mortgage