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Determine mr joness basis in the property received

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Reference no: EM132322436

Question :

Mr. Smith owns property with a basis of $210,000, and an outstanding mortgage of $80,000. During 2018 Mr. Smith sells his property to Mr. Jones for:

a. $250,000 cash

b. A building with a FMV of $300,000. This building has an outstanding mortgage of $70,000, which Mr. Smith assumes.

c. Mr. Jones purchases the property subject to Mr. Smith's mortgage.

d. Mr. Smith pays a sales commission of $20,000.

Determine:

(A) Mr. Smith's amount realized.

(B) Mr. Jones's basis in the property received.

Reference no: EM132322436

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