Fredrico and Orqudea exchanged equipment in a qualifying like-kind exchange. Fredrico gives up equipment with an adjusted basis of $12,000 (fair market value of $15,000) in exchange for Orqudeas equipment with a basis of $12,000 and a fair market value of $13,000 plus $2,000 cash. How much gain should Fredrico recognize on the exchange and what is Orqudeas basis in the equipment received? Fredrico and Orqudea exchanged equipment in a qualifying like-kind exchange. Fredrico gives up equipment with an adjusted basis of $12,000 (fair market value of $15,000) in exchange for Orqudeas equipment with a basis of $12,000 and a fair market value of $13,000 plus $2,000 cash. How much gain should Fredrico recognize on the exchange and what is Orqudeas basis in the equipment received?

Fredricos Gain $2,000, Orqudeas Basis $12,000

Fredricos Gain $3,000, Orqudeas Basis $12,000

Fredricos Gain $2,000, Orqudeas Basis $14,000

Fredricos Gain $3,000, Orqudeas Basis $14,000

Fredricos Gain $1,000, Orqudeas Basis $15,000