Question

Mario transferred real estate with an adjusted basis of $140,000 for similar real estate with a fair market value of $160,000. The exchange qualified as a like-kind exchange. The realized gain on the exchange was $

Answer 1

$20,000

Step-by-step explanation:

Calculation for th e realized gain on the exchange

Using this formula

Realized gain=Fair market value - Adjusted basis

Let plug in the formula

Realized gain=$160,000-$140,0000

Realized gain=$20,000

Therefore the realized gain on the exchange was $ 20,000