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Joe exchanged his personal-use residence (House 1, FMV = $600,000) with Betty. Joe purchased the...

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Accounting

Joe exchanged his personal-use residence (House 1, FMV = $600,000) with Betty. Joe purchased the residence one year ago for $348,000. Joe paid $2,000 in acquisition costs to purchase the residence.

In the exchange, Betty gave Joe a vacation house (House 2, FMV = $600,000). Betty originally purchased the vacation house for $100,000.

What is Joe's gain or loss recognized as a result of the exchange?

What is Joe's basis in House 2 immediately after the exchange?

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