Basis question

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #2986013 Reply
    ssaetern
    Participant

    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.

    #2986976 Reply
    HanHan
    Participant

    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.

Viewing 2 posts - 1 through 2 (of 2 total)
Reply To: Basis question

You can use BBCodes to format your content.
Your account can't use Advanced BBCodes, they will be stripped before saving.

Your information:




Return to Forum Home