Colin wants to exchange a manufacturing facility for Joans office building. Both parties agree that Colins facility is worth $800,000 and that Joans building is worth $775,000. Colin will not enter into the transaction unless it qualifies as a like-kind exchange.

Required: If Colin wants to avoid recognition of any gain, what could the parties do to equalize the value exchanged but still allow the exchange to qualify as a like-kind exchange? Explain.