Will exchanges a building with a FMV of $80,000,a basis of $35,000,and subject to a liability of $30,000 for land with a FMV of $50,000 owned by Jane.The amount realized by Will is

Question

Quizplus · Accepted Answer

The amount realized in a tax exchange is calculated as the fair market value (FMV) of the property received, plus any cash or other property received, minus any liabilities assumed. In this case, Will is exchanging a building with a FMV of $80,000 and assuming a liability of $30,000. So the amount realized by Will is $80,000 + $0 - $30,000 = $50,000, which is the FMV of the land he received from Jane. Therefore, the correct answer is D.

Will Exchanges a Building with a FMV of $80,000,a Basis