1. Tom and his wife want to sell their ranch in Florida (FMV $1,500,000 / basis $500,000) and move to Montana. While looking for land in Montana they met with Joel, a rancher who wants to move to Florida. Joel owns land with a FMV of $1,000,000 and a basis of $100,000. Tom and his wife told him it was not an acceptable exchange. He has countered by adding cattle worth $500,000. If they accept Joels offer:
   1. How much recognized gain will Tom and his wife be taxed on?
   2. What is Tom and his wifes basis in their new property?
   3. What is Joels basis in his new property?