Cornell purchased a 15-year, $80,000 bond from Fulvous Corporation for $64,000 eight years ago. Interest of $8,000 has been amortized over the eight years and added to Cornell's bond basis. In the current year, Fulvous is acquired by Glaucous in a "Type A" reorganization. Cornell exchanges his Fulvous bond for a 7-year, $86,400 Glaucous bond.

Complete the statement below that outlines how Cornell should treat this exchange for Federal income tax purposes.

Cornell has a: realized gain of which $ is recognized.

His basis in the 7-year Glaucous bond is: