The Madison Corporation paid $3,000 for several acres of land in 1994 to use in its business. The land is condemned and taken by the state in March 2018. The company receives $25,000 from the state. Whenever possible, the corporation elects to minimize taxable income. For each of the following independent cases, what is the recognized gain or loss in 2018 on the conversion and the tax basis of the replacement property (replacement land will be purchased in July)?

a. 2019 for $22,500.

b. 2020 for $28,500.

c. 2021 for $23,600.