LO.5 Starling Corporation exchanges a yellow bus (used in its business) for Robin Corporation’s gray bus and some garage equipment (used in its business). The assets have the following characteristics:

Adjusted Basis Fair Market Value Yellow bus $7,000 $9,000 Gray bus 1,000 5,000 Equipment 2,000 4,000

a. What are Starling’s recognized gain or loss and basis for the gray bus and garage equipment?

b. What are Robin’s recognized gain or loss and basis for the yellow bus?