Delta Enterprises trades an asset that costs $55,000 and had accumulated depreciation of $37,000 for another asset with a fair market value of $20,000. The exchange is deemed to lack commercial substance. Delta pays $500 in cash. Delta s asset has a fair market value of $19,500. Compute Delta's recognized gain or loss on the exchange.
a) $2,500 loss recognized
b) $2,500 loss realized but not recognized
c) $1,500 gain recognized
d) $1,500 gain realized, but not recognized