Question - Turquoise Realty Company owns an apartment house that has an adjusted basis of $760,000 but is subject to a mortgage of $192,000. Turquoise transfers the apartment house to Dove, Inc., and receives from Dove $120,000 in cash and an office building with a fair market value of $780,000 at the time of the exchange. Dove assumes the $192,000 mortgage on the apartment house.
a. What is Turquoise's realized gain or loss?
b. What is its recognized gain or loss?
c. What is the basis of the newly acquired office building?