9)

Taxpayer owns beachfront land that he uses in his business. The propertys fair value is $175,000, and Taxpayer's basis in the land is $130,000. Taxpayer is approached by a real estate agent representing a client who would like to exchange a parcel of nearby land for Taxpayer's beachfront property. Taxpayer agrees to the exchange, and he receives the nearby land, valued at $160,000, plus $15,000 in cash. Determine the amount of gain Taxpayer must recognize on the exchange and his basis in the replacement property.

FOR THE TAX YEAR 2019

A) $15,000 gain recognized; $160,000 basis in replacement property

B) $45,000 gain recognized; $130,000 basis in replacement property

C) $15,000 gain recognized; $130,000 basis in replacement property

D) $0 gain recognized; $160,000 basis in replacement property

E) $0 gain recognized; $130,000 basis in replacement property