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    Realized Gains

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    Richard exchanges a building with a FMV of $75,000, a basis of $35,000, and subject to a liability of $25,000 for land with a FMV of $50,000 owned by Bill. What is the amount of Richard's realized gain?

    A. $0
    B. $15,000
    C. $25,000
    D. $40,000

    35,000 + 25,000 = 50,000
    50,000-50,000 = 0 A.

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    Solution Preview

    Realized gain is the excess of the fair market value of the assets received and the liabilities assumed by the buyer over the basis of the property given ...

    Solution Summary

    This solution illustrates how to compute the realized gain on a like-kind exchange.