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:

Cause And Effect

A relationship where one event (the cause) leads to the occurrence of another event (the effect).

Preoperational Stage

A stage in Jean Piaget's theory of cognitive development where children from ages 2 to 7 learn through pretend play but struggle with logic and taking the point of view of other people.

Innately More Nurturing

The belief that certain individuals or genders possess a natural tendency to be more caring and supportive, often attributed to women.

Emotional Connection

A bond between individuals based on feelings of empathy, love, and understanding that goes beyond surface-level interactions.