1. Chaney exchanges land used in her business for another parcel of land. The adjusted basis for her land is $32,000. The land she will receive has a fair market value of $33,000. In addition, Chaney receives cash of $4,000.

1. Calculate Chaneys realized and recognized gain or loss.
2. Calculate Chaneys basis for the assets she received.

2. Carlos, who is single, sells his personal residence on November 5, 2019, for $400,000. His adjusted basis was $125,000. He pays realtors commissions of $20,000. He had owned and occupied the residence for 12 years. Having decided that he no longer wants the burdens of home ownership, he invests the sales proceeds in a mutual fund and enters into a 1-year lease on an apartment. The detriments of renting, including a crying child next door, cause Carlos to rethink his decision. Therefore, he purchases another residence on November 6, 2020, for $275,000.

1. Is Carlos eligible for exclusion of gain treatment under 121 (exclusion of gain on sale of principal residence)?
2. Calculate Carloss recognized gain and his basis for the new residence.