Arlington LLC exchanged land used in its business for some new land. Arlington originally purchased the land it exchanged for $28,000. The new land had a fair market value of $35,000. Arlington also received $2,000 of office equipment in the transaction. What is Arlington's recognized gain or loss on the exchange? Group of answer choices

The Arlington's recognized gain or loss on the exchange is $2,000

Explanation:

For computing the recognize loss or gain, the following treatment is to be done.

The lower of

1. Amount received

2. Realized gain

The amount received is $2,000 and the realized gain is the difference between the purchase cost and the fair market value i. e

= $35,000 - $28,000

= $7,000

So, the lower would be $2,000