Ko Exchanges Computer Equipment (Five-Year Property)with an Adjusted Basis of $9,000

Multiple Choice

Ko exchanges computer equipment (five-year property) with an adjusted basis of $9,000 for a business auto (five-year property) worth $6,000.Ko also receives cash of $5,000.What are the recognized gain or loss and the basis of the new auto?

A) $0 and $9,000.
B) $0 and $6,000.
C) $2,000 and $11,000.
D) ($3,000) and $12,000.