ST Inc. and Firm WX are negotiating an exchange of the following business properties:

ST agrees to pay $150,000 cash to WX to equalize the value of the exchange. ST's adjusted basis in the office building is $700,000, and WX's adjusted basis in the warehouse is $500,000?
Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.

Transcribed Image Text:

Office Building (owned by ST) Warehouse (owned by WX) EMV Mortgage $2,000,000 (450,000) $1,700,000 -0-