Ethyl owns a small strip mall that has an adjusted basis of $950,000 but is subject to a mortgage of $240,000. She transfers the strip mall to Bert and receives from him $150,000 in cash and an office building with a fair market value of $975,000 at the time of the exchange. Assume that this transfer qualifies as a like-kind exchange except for the amount of boot (if any). Bert assumes the $240,000 mortgage on the strip mall.
a. What is Ethyl's realized gain or loss?
b. What is her recognized gain or loss?
c. What is her basis in the newly acquired office building?