Question

Bob owned a duplex used as rental property. The duplex had an adjusted basis to Bob of $86,000 and a fair market value of $300,000. Bob transferred the duplex to his brother, Carl, in exchange for a triplex that Carl owned. The triplex had an adjusted basis to Carl of $279,000 and a fair market value of $300,000. Two months after the exchange, Carl sold the duplex to his business associate to whom he was not related for $312,000. How much, if any, gain or loss did Carl recognize with respect to the sale by Carl to his business associate

Answer 1

Answer:

$12,000

Explanation:

Gain = Sold duplex - Fair market Valve

Gain = 312,000 - 300,000

Gain = $12,000

Therefore $12,000 gain was recognized