Lab Kennels, Inc. and Wolman Developers have agreed to exchange two parcels of land and each will assume the other's mortgage on the parcel acquired. Lab owns 500 acres within city limits that has a value of $750,000 and a basis of $300,000. It is encumbered by a $200,000 mortgage. Wolman's property is raw land outside the city that has a value of $900,000, a basis of $400,000, and is encumbered by a $350,000 mortgage.
a. What are Lab Kennels, Inc. and Wolman Developer's realized and recognized gains or losses on the exchange?
b. What are their deferred gains or losses?
c. What are their bases in the land acquired?