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Allen owns land with an adjusted basis of $610,000, subject to a mortgage of $350,000. On April 1, Allen sold his land subject to the mortgage for $650,000 in cash, a note for $600,000, and property with a fair market value of $120,000. What is the amount realized

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Mona0991

Answer:

Calculation of amount realized:

Particular                         Amount

Cash:                                 $650,000

Note:                                 $600,000

Fair market value:                 $120,000

Mortgage Debt:                 $350,000

The Amount realized was: $1,720,000

Explanation: The $1,720,000 was realized by adding the mortgage cost he sold the land for which was $650,000 to the the note of $600,000, plus the market value which was $120,000, and adding finally, the mortgage debt which was $350,000 all amounting to a realized amount of $1,720,000

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