Federal Taxation 1

Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $36,500. The new land had a fair market value of $39,250. Arlington also received $10,500 of office equipment in the transaction. What is Arlington's recognized gain or loss on the exchange?

Multiple Choice

• $0.

• $10,500.

• $2,750.

• $13,250.

• None of the choices are correct.