Sarah exchanges a yellow bus (used in her business) for Tyler's gray bus and some garage equipment (used in his business). The assets have the following characteristics:
_______________________Adjusted Basis ____________Fair Market Value
Yellow bus .......................... $6,000 ................................ $15,000
Gray bus .............................. 3,000 ................................. 11,000
Equipment ........................... 2,000 ................................... 4,000
a. What are Sarah's recognized gain or loss and basis for the gray bus and garage equipment?
b. What are Tyler's recognized gain or loss and basis for the yellow bus?