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?

A.

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

B.

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

C.

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

D.

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

E.

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