This is my question:

Colin wants to exchange a manufacturing facility for Joan's office building.Both parties agree that Colin's facility is worth $800,000 and that Joan's building is worth $775,000.Colin will not enter into the transaction unless it qualifies as a like-kind exchange.

If Colin wants to avoid recognition of any gain, what could the parties do to equalize the value exchanged but still allow the exchange to qualify as a like-kind exchange?

So far, I understand that for this to qualify as a like kind exchange both properties must be held for productive use or investment exchanges. If that is the case, then this does qualify for a like kind exchange. Joan can offer boot of 25,000 to equalize the exchange. However, that would cause gain recognition which Colin wants to avoid. I am having trouble understanding how I can get this exchange to work without there being any gain recognition.