Molly exchanges a small machine (adjusted basis of $85,000; fair market value of $78,000) used in her business and investment land (adjusted basis of $10,000; fair market value of $15,000) for a large machine (fair market value of $93,000) to be used in her business in a like-kind exchange. What is Mollys recognized gain or loss?

a. $0.

*b. $5,000.

c. ($2,000).

d. ($7,000).

e. None of the above.

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