Molly Exchanges a Small Machine (Adjusted Basis of $85,000; Fair

Multiple Choice

Molly exchanges a small machine (adjusted basis of $85,000; fair market value of $78,000) used in her business and investment land (adjusted basis of $10,000; fair market value of $15,000) for a large machine (fair market value of $93,000) to be used in her business in a like-kind exchange. What is Molly's recognized gain or loss?

A) $0
B) $5,000
C) ($2,000)
D) ($7,000)
E) None of the above