What amount of gain should anderson recognize

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On October 1, 2009, Donald Anderson exchanged an apartment building, having an adjusted basis of $375,000 and subject to a mortgage of $100,000, for $25,000 cash and another apartment building with a fair market value of $550,000 and subject to a mortgage of $125,000. The property transfers were made subject to the outstanding mortgages. What amount of gain should Anderson recognize in his tax return for 2009?

a. $0
b. $25,000
c. $125,000
d. $175,000

Reference no: EM13135668

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