Chad Carter exchanged land with an adjusted basis of $100,000 and a fair market value of $150,000 for Nash Nunn’s land worth $140,000 (basis $120,000) and $15,000 cash. Chad’s mortgage of $35,000 is assumed by Nash and Nash’s mortgage of $40,000 is assumed by Chad.

a. What is Chad’s realized and recognized gain or loss and the basis in his new land?

b. What is Nash’s realized and recognized gain or loss and the basis in his new land?