In 2019, Paul and Samantha entered into a §1031 like-kind exchange. Paul exchanged an apartment building in Washington for Samantha’s apartment building in Oregon. Paul’s apartment building had a fair market value of $700,000 and an adjusted basis of $275,000. Paul’s apartment building is also encumbered by a $150,000 mortgage. Samantha’s building has a fair market value of $500,000 and has an adjusted basis of $175,000. Samantha will assume the mortgage on Paul’s apartment building. Samantha will also pay Paul $50,000 in cash. 1. What are Paul’s and Samantha’s realized and recognized gains or losses on the exchange? 2. What are Paul’s and Samatha’s bases in the new buildings acquired
In 2019, Paul and Samantha entered into a §1031 like-kind exchange. Paul exchanged an apartment building in Washington for Samantha’s apartment building in Oregon. Paul’s apartment building had a fair market value of $700,000 and an adjusted basis of $275,000. Paul’s apartment building is also encumbered by a $150,000 mortgage. Samantha’s building has a fair market value of $500,000 and has an adjusted basis of $175,000. Samantha will assume the mortgage on Paul’s apartment building. Samantha will also pay Paul $50,000 in cash.
1. What are Paul’s and Samantha’s realized and recognized gains or losses on the exchange?
2. What are Paul’s and Samatha’s bases in the new buildings acquired
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