John and Larry entered into a qualified exchange of like-kind property. Information about the properties being exchanged is provided below.

Data:

Parcel 1 property transferred from John to Larry:

Fair market value of Parcel 1: $164,000

John's adjusted basis in Parcel 1: $137,000

Remaining mortgage on Parcel 1 assumed by Larry: $41,000

Parcel 2 property transferred from Larry to John:

Fair market value of Parcel 2: $133,000

Larry's adjusted basis in Parcel 2: $122,000

Questions

Answer the following questions on Tab 2 of your Excel Spreadsheet based on the information provided. If the response is zero, enter a 0. Show all calculations.

1. What is the gain recognized by John on the exchange?
2. What is John's basis in the new Parcel 2 received by Larry?