The Madison Corporation paid $3,000 for several acres of land in 1993 to use in its business. The land is condemned and taken by the state in March 2016. 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 2016 on the conversion and the tax basis of the replacement property (replacement land will be purchased in July)?
a. 2017 for $22,500.
b. 2018 for $28,500.
c. 2019 for $23,600.