Jon Thomas owns a small flour mill that he uses exclusively in his pastry business. The flour mill has an adjusted basis of $300K and a fair market value of $200K. He trades the flour mill for a sugar refinery that he will also use exclusively in his business. The sugar refinery has a fair market value of $250K. Jon will need to pay $50K cash to finalize the deal. The flour mill and the sugar refinery are both real-estate.

What is the amount of Jon's realized gain or loss, and recognized gain or loss?

What is Jon's basis in the newly-acquired sugar refinery?

Recommend a better way that this transaction could have been handled? Please explain.