Answer:
Moss
The recognized loss and the basis of the office building are:
Recognized loss = $90,000
Basis of office building = $360,000
Explanation:
a) Data and Calculations:
Adjusted basis of warehouse = $600,000
Fair market value of the office building = $360,000
Cash received in exchange = $150,000
Total value of assets received in exchange of the warehouse = $510,000 ($360,000 + $150,000)
Recognized loss = $90,000 ($600,000 - $510,000).
b) From the above transactions, Moss will recognize a loss of $90,000. This is the difference between the adjusted basis of the warehouse and the fair market value of the office building and the cash that Moss received in exchange for the warehouse.
