John owns a vacant lot near downtown that they rent as parking space during special events (art festivals and special events). He inherited the parcel from his uncle in 2010. His uncle purchased it for $52,000 in 1995. The value at the time of his uncle's death was $82,000. This is a dirt lot; John has made no improvements to it. Real estate taxes are $600.

Question: There is a parcel of land next to the Playful Paws, Inc. building. Ellen, the owner of this property, approached John to discuss the idea of selling it to him. John is interested. Ellen knows that John owns a vacant lot downtown (referenced in the case study facts) and proposed an exchange. She told John there may be a tax advantage for John in doing so. The land next to Playful Paws is worth $100,000. In addition to the land, Ellen will pay John $20,000 cash at closing.

Assuming they complete the exchange, please let John know:

A. His current basis.

B. If there are any immediate tax consequences as a result of the sale.

C. His basis in the new lot after the exchange.