Question: 11. Hogan exchanged a business-use machine having an original cost of $100,000 and accumulated depreciation of $30,000 for business-use equipment owned by Baker having a

11. Hogan exchanged a business-use machine having an original cost of $100,000 and accumulated depreciation of $30,000 for business-use equipment owned by Baker having a fair market value of $80,000 plus $1,000 cash. Baker as- sumed a $2,000 outstanding debt on the machine. What taxable gain should Hogan recognize?

a. $0

b. c. $ 3,000 $10,000

d. $11,000

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