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In an exchange, Florida gave up her investment-use property (FMV $25,000, basis $12,000) and $5,000 for a larger piece of investment-use property (FMV $30,000). What

In an exchange, Florida gave up her investment-use property (FMV $25,000, basis $12,000) and $5,000 for a larger piece of investment-use property (FMV $30,000). What is the gain realized and recognized on the exchange?

$0 realized gain; $13,000 recognized gain.

$5,000 realized gain; $17,000 recognized gain.

$13,000 realized gain; $0 recognized gain.

$17,000 realized gain; $5,000 recognized gain.

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