Hilary exchanges a piece of equipment which she purchased in 2009 at a cost of $20,000 for a new piece of equipment with a fair market value of $18,000. Hilary took depreciation on the equipment she is giving up of $8,000 and its current fair market value is $15,000. To equalize the transaction, Hilary is giving $3,000 in cash to Bill, the owner of the replacement property. Hilary realizes and recognizes the following gain from the transaction:

a. Hilary realizes a gain of $6,000, but recognizes no gain.

b. Hilary realizes a gain of $6,000 and recognizes a gain of $3,000 because she received boot.

c. Hilary realizes a gain of $3,000 and recognizes a gain of $3,000 because she gave boot.

d. Hilary realizes a gain of $3,000, but recognizes no gain.