Lyle exchanged an apartment building (1250 property) with a FMV of $400,000 and an A/B of $100,000 for real property worth $400,000. The acquired property consisted of land worth $350,000 and a small house worth $50,000. Lyle had used accelerated depreciation and had taken $300,000 of depreciation on the apartment building. If he had used SL depreciation, he would have taken $200,000 of depreciation. (Hint: Did he receive enough 1250 property to cover the 1250 taint?) a. What is the amount of his realized gain? b. What is the amount and character of his recognized gain, if any? c. What is the basis in the house after the exchange?

Answer rating: 100% (QA)

To solve this problem we need to calculate the realized gain recognized gain and the basis in the ho... View the full answer