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What is the fair market value of eleanor lakefront y

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Reference no: EM132725155

Eleanor exchanged Lakefront land held for investment for a parcel Mountaintop land. Eleanor intends to hold the Mountaintop land for investment as well. Eleanor's basis in the Lakefront property is $40,000. It is subject to a mortgage of $60,000 (which the acquirer, Fenton, assumes).

  • In order to obtain Eleanor's property, Fenton transferred the Mountaintop property (worth $100,000). The Mountaintop property was subject to a mortgage of $30,000. Fenton's basis in the property was $110,000. In addition, Fenton transferred stock with a fair value of $25,000 (basis of $18,000). Fenton held the Mountaintop property for business, but intends to hold the Lakefront property for investment.

Required:

Problem a) Briefly explain how Eleanor and Fenton will report this exchange for federal tax purposes. List the authorities on which you rely.

Problem b) What is the fair market value of Eleanor's lakefront property?

Reference no: EM132725155

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