Firm ML$,$ a noncorporate taxpayer, exchanged residential rental property plus $$21,000$ cash for $20$ acres of investment land with a $$256,000$ FMV$.$ ML used the straight$-$line method to compute depreciation on the rental property.

Required:

Assuming that ML$$s exchange was negotiated at arm$$s length, what is the FMV of the rental property?

If the adjusted basis of the rental property is $$225,000,$ compute ML$$s realized and recognized gain.

Compute ML$$s basis in the $20$ acres of investment land.