The taxpayer exchanges property in 2010 with a fair market value of $5,500,000 that has a basis of $750,000. The property is also subject to a mortgage of $2,500,000. The taxpayer receives like-kind replacement property with a value of $6,500,000 that is subject to a mortgage of $1,000,000. In order to balance the equities in the exchange, the taxpayer contributes additional funds as needed. Additional facts: Adjusted basis of the relinquished property is composed of the following amounts: Land 400,000 Building 450,000 Accumulated depreciation (100,000) Adjusted basis 750,000 The fair market value of the land and building of the replacement property are as follows: Land 2,500,000 Building 4,000,000 Total 6,500,000 Answer the following questions:
a) How much is the realized gain?
b) How much is the total boot, if any?
c) Is there mortgage boot? If so, how much?
d) How much new money was contributed by the taxpayer to balance the equities?
e) What is the total basis of the like-kind property received?
f) Provide the following basis* items immediately after the exchange for the like-kind property received: Cost Basis Accumulated Depreciation Total Land (Old) Building (New) Building Totals * Using the default method under IRC Reg. Sec. 1.168(i)-6