LaRhonda realized and recognized gain or loss are: $45,000; $35,000.
a. LaRhonda realized gain:
Using this formula
Realized gain = (Cash + Fair market value of building + Mortgage) - Adjusted basis
Let plug in the formula
Realized gain = ($15,000 + $50,000 + $20,000) - $45,000
Realized gain = $85,000-$45,000
Realized gain = $40,000
b. LaRhonda recognized gain or loss
Using this formula
Recognized gain = Cash + Mortgage
Let plug in the formula
Recognized gain =$15,000 +$20,000
Recognized gain= $35,000
Inconclusion LaRhonda realized and recognized gain or loss are: $45,000; $35,000.
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