Jalapeno Company trades in its old delivery van for a new delivery van. The old van cost $22,000 and has an adjusted basis of $15,000. Jalapeno is given a $13,000 trade-in allowance on the new van and pays the remaining $14,000 of the $27,000 purchase price in cash.
What is Jalapeno's realized gain or loss on the exchange?
How much of the realized gain or loss is recognized on the exchange?
How much of the realized gain or loss is deferred?
What is the basis of the new delivery van?