Herman exchanges his apartment complex for Heidi’s farm,
and the exchange qualifies as a like-kind exchange. Herman’s
adjusted basis for the apartment complex is $600,000 and the
complex is subject to a $180,000 liability. The fair market value
of Heidi’s farm is $770,000, and the farm is subject to a $100,000
liability. How much, if any, is Herman’s recognized gain and his
basis in the farm?
The amount of boot received
by Herman is $80,000 ($180,000 minus $100,000). If each...