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Mario transferred a building with an adjusted basis of $140,000 for a similar building with a fair market value of $100,000 and cash of $60,000. The exchange qualified as a like-kind exchange. The realized gain on the exchange was ____.

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Answer: $20.000

Explanation: The profit made by exchanging is asset is $ 20,000 because this new asset will be registered as an asset of $ 160,000 since its value is $ 100,000 and additionally we are giving $ 60,000 this adds up and in the end the value of this asset is going to be $ 160,000 so if we are transferring a good of $ 140,000 the difference is $ 20,000 and that is why this would be the profit that should be recorded in the income statement