Kim owns equipment that is used exclusively in her business. The equipment has an adjusted basis of

Question:

Kim owns equipment that is used exclusively in her business. The equipment has an adjusted basis of $8,500 (FMV $5,000). Kim transfers the equipment and $2,000 cash to David for a computer (also used for business purposes) that has a FMV of $7,000.
a. What is Kim’s recognized gain or loss on the exchange?
b. What is Kim’s adjusted basis in the computer?