Jerry sells his delivery truck, which has a basis of $25,000, to Toms Truck Company for $10,000.

Question:

Jerry sells his delivery truck, which has a basis of $25,000, to Tom’s Truck Company for $10,000. On the same day, he purchases a new truck from Tom’s Truck Company at a cost of $40,000.
a. Does Jerry recognize any gain or loss on the old truck?
b. What is Jerry’s basis in the new truck?