Brian owns a duplex used as rental property. The duplex has a basis of $84,000...
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Accounting
Brian owns a duplex used as rental property. The duplex has a basis of $84,000 and $380,000 FMV. He transfers the duplex to Carrie, his sister, in exchange for a triplex that she owns. The triplex has a basis of $280,000 and a $380,000 FMV. Two months after the exchange,Carrie sells the duplex to a business associate for $395,000.
Requirements
Determine:
a.
Brian's
realized and recognized gain on the exchange.
b.
Carrie's
realized and recognized gain on the exchange.
Requirement a. Determine Brian's realized and recognized gain on the exchange.
Begin with the realized gain. First identify the formula, then enter the applicable amounts and calculate the realized gain.
Amount realized (Brian)
-
Adjusted basis (duplex)
=
Realized gain
$380,000
-
$84,000
=
$296,000
Determine
Brian's recognized gain on the exchange.
The recognized gain is $
.
Answer & Explanation
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