Question: Assume the following exchange meets the necessary requirements and thus qualifies for tax purposes as a "like-kind exchange." Captain Kirk exchanges land that is used in his business and has a FMV of $610,000 for Spock's building, which has a FMV of $325,000. Captain Kirk's basis in the land is $305,000 and Captain Kirk's land is subject to a liability of $31,000 which Spock assumes.
(a) What is Captain Kirk's recognized gain or loss on this transaction?
(b) What is Captain Kirk's basis in the building?