What does the term 'amount realized' include?

The term 'amount realized' is crucial in understanding capital gains and losses during the sale of an asset. It encompasses not just the cash received from the transaction but also any other considerations that might affect the total value obtained from the sale. This includes the fair market value of any property received in the transaction as well as any liabilities assumed by the buyer.

Therefore, the correct answer incorporates both the cash received and the fair market value of any other property. This comprehensive view ensures that all elements of the transaction are accounted for, providing a clearer picture of the total proceeds from the sale.

The other options fail to capture the full scope of what 'amount realized' entails. For example, focusing only on cash or only on fair market value overlooks the combined financial outcome of the transaction.