Alice owns land with an adjusted basis of $610,000, subject to a mortgage of $350,000. On April 1, Alice sells her land subject to the mortgage for $650,000 in cash, a note for $600,000, and property with a fair market value of $120,000. What is the amount realized?
A) $1,250,000
B) $1,370,000
C) $1,720,000
D) $1,820,000
E) None of the above

Question

Quizplus · Accepted Answer

The amount realized is the sum of all the consideration received in the transaction. In this case, it would be:

Cash received: $650,000 
Note received: $600,000 
Property received: $120,000

Total amount realized = $650,000 + $600,000 + $120,000 = $1,370,000.

Alice Owns Land with an Adjusted Basis of $610,000, Subject