Jason and Mark exchange storage buildings each use in their business. In the trade, Jason receives Mark's storage building that is worth $20,000. Mark also assumes the $10,000 loan Jason had on the building. Jason purchased his storage building for $25,000 and had taken $12,000 of depreciation on the building up to the date of exchange. Mark's adjusted basis in his building is $16,000 on the date of exchange.

a. what is Jason's realized gain on the exchange?

b. What are the amount and the character of the gain Jason must recognize on the exchange?

c. What is Jason's basis in the storage building acquired in the exchange?

Answer rating: 100% (QA)

1Marks adjusted basis on exchanged building 16000 A... View the full answer