$1.$ Land Exchange$$ Maximum Points: $12$

There is a parcel of land next to the Playful Paws, Inc. building. Ellen, the owner of this property, approached David to discuss the idea of selling it to him. David is interested. Ellen knows that David owns a vacant lot downtown $($referenced in the case study facts$)$ and proposed an exchange. She told David there may be a tax advantage for David in doing so$.$ The land next to Playful Paws is worth $$100,000.$ In addition to the land, Ellen will pay David $$20,000$ cash at closing.

$$

Assuming they complete the exchange, please let David know:

A$.$ His current basis.

B$.$ If there are any immediate tax consequences because of the sale.

C$.$ His basis in the new lot after the exchange.

$$