Viktor exchanges stock (adjusted basis $19,000, fmv $26,800) and real estate (adjusted basis $19,000, fmv $46,000) held for investment for other real estate to be held for investment. the real estate acquired in the exchange has an fmv of $70,200. what are viktor’s realized and recognized gain or loss? what is the basis of the acquired real estate?

Answer and Explanation:

Fair Market Value of stock = $26,800

Adjusted Basis                    = ($19,000)

                                                $7,800 - Gain

There won't be a gain on real estate exchanges as it not recognized.

FMV real estate exchange = $70,200

Deferred Gain on Real Estate =($45,800)   - (19,000 + 26,800 = $45,800)

                                                    $ 24,400

typically a loft will include modern kitchen and bathrooms, this increases the price tag. lofts also have a good amount of open space, this requires more heating and electricity. lofts are also in older buildings, this means that maintaining the location increases the bill. keep in mind this is without talking about the high state and property taxes.

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