Sarah owned land that she used in her business that cost her $$160,000$ in $20$x$1.$ It was purchased with $$20,000$ from her personal savings and a bank loan of $$140,000.$ She has been looking to exchange the property for something in NYC$.$ On February $1,20$x$6$ when the property was worth $$250,000$ and the mortgage balance was $$40,000,$ Sarah exchanged the property subject to the mortgage for qualifying $$like$-$kind$$ property with a fair market value of $$234,000$ that had a basis to the other party $($Megan$)$ of $$44,000.$ There was no mortgage on the property Sarah was receiving from Megan.

a$.$ The transaction described above does not yet make sense. Assume the parties agree that cash boot will be used to $$complete$$ the transaction. Who pays whom, and how much?

b$.$ Calculate the realized gain or loss, recognized gain or loss, and deferred gain or loss for both Sarah and Megan