Maud exchanges a rental house at the beach with an adjusted basis of $475,000 and a fair market value of $460,000 for a rental house at the mountains with a fair market value of $400,000 and cash of $60,000.What is the recognized gain or loss?
A)$0.
B)$50,000.
C)$60,000.
D)($15,000).
E)None of the above.

Question

Quizplus · Accepted Answer

In a like-kind exchange, the recognized gain is the lesser of the boot received ($60,000) or the realized gain ($460,000 - $475,000 = -$15,000). Since the realized gain is a loss, the recognized gain is $0.

Maud Exchanges a Rental House at the Beach with an Adjusted