Business $K$ exchanged an old asset $($FMV $$95,000)$ for a new asset $($FMV $$95,000).$ Business K$\text{'}$s tax basis in the old asset was

$$113,000.$

Required:

a$.$ Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable

transaction.

b$.$ Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset, assuming the exchange was a nontaxable

transaction.

c$.$ Six months after the exchange, Business $K$ sold the new asset for $$103,000$ cash. How much gain or loss does Business $K$

recognize if the exchange was taxable? How much gain or loss if the exchange was nontaxable?

Complete this question by entering your answers in the tabs below.

Required A

Compute Business K$\text{'}$s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable

transaction.

Note: Losses should be indicated with a minus sign.