Answer:
A. 23,600
B. 14,160
Explanation:
land adjusted basis = $118,000
land worth = $141,600
fair market value of land = $112,100
<u>Requirement A</u>
Amount realized = Fair value + cash received
Amount realized = 112,100 + 29,500
Amount realized = 141,600
Less: adjusted basis = 118,000
Realized gain = 23,600
Note: Recognized gain is lower of cash received and realized gain
In this case, realized gain is lower so,
Logan's Recognized gain = 23,600
<u>Requirement B</u>
Amount realized = Fair value + cash received
Amount realized = 127,440 + 14,160
Amount realized = 141,600
less adjusted basis = 118,000
Realized gain = 23,600
Note: Recognized gain is lower of cash received and realized gain
In this case, cash received is lower So,
Logan's Recognized gain = 14,160