You have Parking Lot 1 used in a trade or business and you trade it for Parking Lot 2 to be used in a trade or business. Here are the facts:

Asset sold - Parking Lot 1

$400,000 Historical Cost

Purchased on 1/1/2015

$125,000 Deprciation taken on improvements to date

$20,000 severance paid by city for a utility easement in 2017

$10,000 selling expenses paid on sale

Asset received from purchasing party - Parking Lot 2

$150,000 adjusted basis

$300,000 Fair market value

Plus $50,000 Assumption of Mortgage on Parking Lot 1

What is the recognized gain and basis of Parking Lot 2?

No gain recognized $255,000 basis of Parking Lot 2 $50,000 gain recognized $325,000 basis of Parking Lot 2 $15,000 gain recognized $300,000 basis of Parking Lot 2 $50,000 gain recognized $305,000 basis of Parking Lot 2