Answer:
A. $30,000 gain recognized
$210,000 Basis
B.The gain which was recognized will be the lesser of the amount of the gain realized .
Explanation:
Alexie's recognized gain and her basis in Sorenson stock would be:
a)land valued $250,000 - Basis $220,000 =$30,000
This means that the $30,000 will be gain recognized and her basis will be $210,000
b)The gain which was recognized will be the lesser of the amount of gain realized which is
(Land value $250,000 - Basis $220,000 = $30,000)
Less FMV of the boot received which is $40,000 = $210,000
