Maud exchanges a rental house at the beach with an adjusted basis of $225,000 and a fair market value of $200,000 for a rental house at the mountains with a fair market value of $180,000 and cash of $20,000.What is the recognized gain or loss?
A)$0
B)$20,000
C)($20,000)
D)($25,000)
E)None of these

Question

Quizplus · Accepted Answer

Amount realized ($180,000 + $20,000)$ 200,000
Adjusted basis (225,000)
Realized loss ($ 25,000)
Recognized loss $ -0-
The receipt of boot generally does not result in recognition if there is a realized loss.

Maud Exchanges a Rental House at the Beach with an Adjusted