Steve Stromm transfers an oﬃce building with an adjusted basis of $200,000 and a fair market value of $300,000 for Andrew Astor's oﬃce building (adjusted basis $190,000) with a fair market value of $250,000. Steve's mortgage of $120,000 is assumed by Andrew whose mortgage of $70,000 is assumed by Steve. What is the realized and recognized gain or loss for Steve and Andrew and what are their bases in their acquired buildings?

Question

Quizplus · Accepted Answer

The Answer of Steve Stromm transfers an oﬃce building with an adjusted basis of $200,000 and a fair market value of $300,000 for Andrew Astor's oﬃce building (adjusted basis $190,000) with a fair market value of $250,000. Steve's mortgage of $120,000 is assumed by Andrew whose mortgage of $70,000 is assumed by Steve. What is the realized and recognized gain or loss for Steve and Andrew and what are their bases in their acquired buildings?

Steve Stromm Transfers an Oﬃce Building with an Adjusted Basis