Zandu Corporation Exchanged a Building (Fair Market Value = $1,000,000

Short Answer

Zandu Corporation exchanged a building (fair market value = $1,000,000, adjusted basis = $700,000) and two semi-tractor-trailers (fair market value = $300,000; adjusted basis = $225,000), all five years old, for land to build a new facility valued at $1,300,000. What is Zandu's realized and recognized gain and its basis in the land?
$\begin{array}{lll}&\text { Realized gain } & \text { Recognized gain } & \text { Basis of land } \\a.&0 & 0 & \$ 925,000 \\b.&\$ 75,000 & \$ 75,000 & \$ 1,000,000 \\c.&\$ 300,000 & \$ 300,000 & \$ 1,300,000 \\d.&\$ 375,000 & \$ 75,000 & \$ 1,000,000\end{array}$