Bourne Guitars, a corporation, reported a $240,000 net 1231 gain for year 6.

a. Assuming Bourne reported $54,500 of nonrecaptured net 1231 losses during years 15, what amount of Bournes net 1231 gain for year 6, if any, is treated as ordinary income?

b. Assuming Bournes nonrecaptured net 1231 losses from years 15 were $279,000, what amount of Bournes net 1231 gain for year 6, if any, is treated as ordinary income?

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Kase, an individual, purchased some property in Potomac, Maryland, for $213,000 approximately 10 years ago. Kase is approached by a real estate agent representing a client who would like to exchange a parcel of land in North Carolina for Kases Maryland property. Kase agrees to the exchange. What is Kases realized gain or loss, recognized gain or loss, and basis in the North Carolina property in each of the following alternative scenarios? (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. The transaction qualifies as a like-kind exchange and the fair market value of each property is $687,500.

b. The transaction qualifies as a like-kind exchange and the fair market value of each property is $150,000.