Julio exchanged his 350000 of bonds and 75000 of stock

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Julio exchanged his $350,000 of bonds and $75,000 of stock (basis $10,000) in Calcite Corporation for $50,000 of stock and $375,000 in bonds in Mercury Corporation. Which is Julio's recognized gain or loss, and which is Julio's basis in his stock? (Points : 2)

Julio has a recognized gain of $25,000 and a basis in his stock of $10,000.

Julio has a recognized gain of $25,000 and a basis in his stock of $40,000.

Julio has a recognized loss of $25,000 and a basis in his stock of $40,000.

Julio has a realized loss of $25,000, no recognized loss, and a basis in his stock of $40,000.

Reference no: EM13575777

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