Emily owns land for investment purposes that has a FMV of $300,000 (basis of $260,000).  She exchanges the land, plus $40,000 cash, for a warehouse to be used in her business.  The warehouse is worth $420,000, but is subject to a mortgage of $80,000 which Emily will assume.  The gain realized by Emily on the exchange is

A) $40,000.
B) $ 80,000.
C) $ 120,000.
D) $ 160,000.

Answer rating: 100% (QA)

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