3. Assume there is no mortgage but Waterland is worth $45 so Bee gets Waterland plus $55 in cash.

a)Does Bee realize gain/loss on the transaction and if yes, how much?

b)Does Bee recognize gain/loss on the transaction and if yes, how much?

c)What is Bees basis in Waterland?

4. Sam buys machinery for use in a trade or business for $100,000. After three year $30,000 of depreciation has properly been deducted. Give the amount and character off the gain of loss in each of the following independent cases:

a) Sam sells the machine for $82,000.

b) Sam sells for $69,500

c) Sam sells for $103,400.