Homework Answers
Here only answer (a) can be answered as other information is missing
Realised Gain= Adjsuted Value of Property (Consideration received) = 120,000
Mortgage Value of Property (cost )= 140,000
Hence there is realised loss as Consideration received from property is less than its mortgaged value, Hence it has unrealized loss of (USD 140,000-USD 120,000)= USD 20,000
Recognized Gain, = There will ne no recognized gain as there is no realized gain ,In a sale, tax is paid on the realized gain. Recognized gain is the taxable gain. Recognized gain is the lesser of realized gain or the consideration received
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