Metro Corp. traded machine A for machine B. Metro originally purchased machine A for $50,000 and machine A's adjusted basis was $25,000 at the time of the exchange. What is Metro's realized gain or loss, recognized gain or loss, and adjusted basis in machine B in each of the following alternative scenarios?
A. The fair market value of machine A and of machine B is $40,000 at the time of the exchange. The exchange does not qualify as a like-kind exchange.
B. The fair market value of machine A and of machine B is $40,000. The exchange qualifies as a like-kind exchange.
C. The fair market value of machine A is $35,000 and machine B is valued at $40,000. Metro exchanges machine A and $5,000 cash for machine B. Machine A and machine B are like-kind property.
D. The fair market value of machine A is $45,000 and Metro trades machine A for machine B valued at $40,000 and $5,000 cash. Machine A and machine B are like-kind property.
