Natale transfers to Window Corporation depreciable machinery originally costing $ 23,000 and now having a(n) $ 18,000 adjusted basis. In exchange, Natale receives all 75 shares of Window stock having a(n) $ 22,000 FMV and a three-year Window note having a(n) $ 7,000 FMV.

a. What are the amount and character of Natales recognized gain or loss?

b. What are Natales bases in the Window stock and note?

c. What is Windows basis in the machinery?