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Accounting

Problem:

Kevin exchanges an office building used in business for one owned by Charlene. The FMV of Kevin's building is $28,000 (basis $150,000) and it is subject to a mortgage of $50,000, which is assumed by Charlene. Kevin receives $30,000 cash and Charlene's office building, which has a FMV os $200,000 (basis of $180,000).

Required:

Question 1: What is the amount of gain realized by Kevin?

Question 2: What is the amount of gain recognized by Kevin?

Question 3: What is the basis of the new building to Kevin?

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165237

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