$3.$ Pat owns a $1965$ red Mustang car which he uses for BUSINESS use ONLY. He uses it to deliver cupcakes his wife makes in their little side business $$#$1$ CUPCAKES! He purchased it four years ago for $$22,000,$ and it currently is worth $$20,000.$ It$$s basis for tax purposes is $$10,000.$ He exchanges it for another $1965$ Mustang worth $$15,000$ same car, different color $$ green $-$ but he wanted a little change! To even up the deal, he also gets cash of $$5,000.$

a$.$ What is Pat$$s realized gain or loss on the exchange?

b$.$ What is Pat$$s recognized gain or loss on the exchange?

c$.$ Pat $$ being Pat $$ is a fickle guy! Two weeks after he got the green Mustang, someone offered him $$25,000$ for the green Mustang! So$,$ he sells it for $$25,000.$What is his REALIZED gain or loss on the sale of the green Mustang?

d$.$ And what is his RECOGNIZED gain or loss on that sale?