Mary exchanged an office building used in her business for some land. mary originally purchased the building for $45,000, and it had an adjusted basis of $20,000 at the time of the exchange. the land had a fair market value of $40,000. mary also gave $4,000 to the seller in the transaction. what is mary's adjusted basis in the land after the exchange? group of answer choices
a. $20,000b. $24,000c. $36,000d. $40,000e. none of these choices are correct

The answer is: B) $24,000

Explanation:

This type of exchange is classified as a like-kind exchange (1031 exchange); it is a transaction that allows a company to dispose an asset and acquire another replacement asset without generating a tax liability from the sale of the replaced asset.

$40,000 (replacement asset) + $4,000 (cash paid) - $20,000 (replaced asset) = $24,000

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.