Firm ML, a noncorporate taxpayer, exchanged residential rental property plus $18,000 cash for 20 acres of investment land with a $192,000 FMV. ML used the straight-line method to compute depreciation on the rental property.

Required:

1. Assuming that MLs exchange was negotiated at arms length, what is the FMV of the rental property?
2. If the adjusted basis of the rental property is $159,750, compute MLs realized and recognized gain.
3. Compute MLs basis in the 20 acres of investment land.