Jackson Inc. owns warehouse (adjusted basis of $20,000; FMV of $25,000). Jackson Inc. exchanges the its warehouse along with its business car (adjusted basis of $14,000; FMV of $15,000) with Bob Corp for new warehouse (adjusted basis of $20,000; FMV of $40,000). 

(1) Determine Jackson Inc.’s realized gain or loss, recognized gain or loss, and adjusted basis of the new warehouse received, respectively.

(2) In general, realized gain or loss is not recognized under like-kind exchange. Instead, recognition of realized gain or loss is postponed until the sale or exchange of the property. Discuss 

(a) why the realized gain or loss is not recognized, and 

(b) how the realized gain or loss is recognized later.