Question: please show work or explain how you got the answer Lily exchanges a building she uses in her rental business for a building owned by

please show work or explain how you got the answer

Lily exchanges a building she uses in her rental business for a building owned by Kendall. She will use the building in her rental business. The adjusted basis of Lily's building is $120,000 and the fair market value is $170,000. Which of the following statements is correct?

a. Lily's recognized gain is $50,000 and her basis for the building received is $170,000.

b. Lily's recognized gain is $0 and her basis for the building received is $120,000.

c. Lily's recognized gain is $0 and her basis for the building received is $170,000.

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