[ssaetern]

In the current year, Vinton exchanged unimproved land for an apartment building. The land had a basis of $300,000, and a fair market value (FMV), of $420,000, and was encumbered by a $100,000 mortgage. The apartment building had an FMV of $550,000 and was encumbered by a $230,000 mortgage. Each party assumed the other’s mortgage. What is Vinton’s basis in the office building?

The answer for this question is $430K. But my question is does Vinton’s basis in the building increase if he gave cash and/or property? And his basis would decrease if he received cash and/or property? Thanks.

AUD - 78
BEC - 78
FAR - 85
REG - 83

So glad to have my life back!

[Han]

This website explains what happens when cash is received: https://taxshop.tax/portfolio-item/how-are-mortgages-handled-in-a-like-kind-exchange/

Also yes to both of your questions.

[Author]

Replies