1. In the current year, a taxpayer exchanged an office building for a commercial warehouse. The office building had a basis of $100,000, an FMV of $120,000, and was encumbered by a $90,000 mortgage. The taxpayer received a warehouse with an FMV of $150,000, which was encumbered by a $105,000 mortgage. Each party assumed the other's mortgage. What is the amount of the taxpayer's recognized gain?

1. $0
2. $16,000
3. $30,000
4. $35,000