Parcel A property transferred from Smith to Jones:

Fair market value of Parcel A $ $299,000$

Smith's adjusted basis in Parcel A $ $189,000$

Remaining mortgage on Parcel A assumed by Jones $ $49,000$

Parcel B property transferred from Jones to Smith:

Fair market value of Parcel B $ $270,000$

Jones' adjusted basis in Parcel B $ $170,000$

Remaining mortgage on Parcel B assumed by Smith $ $20,000$

$1)$ List the realized gain, recognized gain, and basis for Smith.

$2)$ Who do you think leaves this exchange the happiest from the tax perspective? Briefly state why.

$3)$ Now imagine Smith and Jones are trading luxury cars $($all numbers are the same, otherwise$).$ List the realized gain and recognized gain for Smith.

Answer rating: 100% (QA)

1 Realized Gain Recognized Gain and Basis for Smith Realized Gain Sale Proceeds Adjusted Basis 29900... View the full answer