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.