Logan and Johnathan exchange land, and the exchange qualifies as like kind under § 1031. Because Logan's land (adjusted basis of $85,000) is worth $100,000 and Johnathan's land has a fair market value of $80,000, Johnathan also gives Logan cash of $20,000.
a. What is Logan's recognized gain?
b. Assume instead that Johnathan's land is worth $90,000 and he gives Logan $10,000 cash. Now what is Logan's recognized gain?