Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV) of stock owned by Hayden. Hayden takes the land subject to the liability. Jack incurs $500 of selling expenses. What is the amount of Jack's realized gain on the exchange?
A) ($14,000) loss
B) ($14,500) loss
C) $6,500 gain
D) $7,000 gain
C) $6,500 gain
Amount realized $71,500 (FMV stock $50,000 + $22,000 debt assumed by buyer - $500 selling expenses) - $65,000 basis = $6,500 gain.
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