(Answered) Question - on october 1 toby exchanged an apartment

Accounting

Question - On October 1, Toby exchanged an apartment building (adjusted basis of $475,000 and subject to a mortgage of $225,000) for another apartment building owned by Eddie (fair market value of $750,000 and subject to a mortgage of $225,000). The property transfers were made subject to the outstanding mortgages. What amount of gain should Toby recognize?

a. $0.

b. $50,000.

c. $225,000.

d. $275,000.

e. None of the above.

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