1. Sunset LLC sold furniture for $85,000. Sunset bought the furniture for $70,000 several years ago and has claimed $45,000 of depreciation expense on the machine. Sunset LLC also reported a net section 1231 loss of $8,000 two years ago. What is the amount and character of Sunset's gain or loss?

2. Adam and Ben traded parcels of land (both used in their respective business, i.e. like-kind). Adam's land A had an adjusted basis of $40,000 and FMV of $95,000. Ben's land B had an adjusted basis of $26,000 and FMV of $85,000. To make the trade equal, Ben also contributed $10,000 of cash to Adam. What is Adam's realized gain and recognized gain? What is Adam's basis in the land received?