Molly Exchanges a Small Machine (Adjusted Basis of $85,000; Fair

question 14

Multiple Choice

Molly exchanges a small machine (adjusted basis of $85,000; fair market value of $78,000) used in her business and investment land (adjusted basis of $10,000; fair market value of $15,000) for a large machine (fair market value of $93,000) to be used in her business in a like-kind exchange. What is Molly's recognized gain or loss?

• A)$0
• B)$5,000
• C)($2,000)
• D)($7,000)
• E)None of the above

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Definitions:

Autonomic Nervous System

A part of the peripheral nervous system responsible for regulating involuntary body functions, like heartbeat, blood flow, breathing, and digestion.

Energy Stores

The various forms in which energy can be kept or held, including chemical, mechanical, thermal, and nuclear, among others, within a physical system.

Sympathetic Nervous System

A part of the autonomic nervous system that activates what is often termed the fight or flight response, preparing the body for rapid action in response to threats.

Internal Organs

Vital parts within the body, such as the heart, lungs, and liver, that perform essential functions required for survival.