Firm M exchanged an old asset with a $14,600 tax basis and a $35,000 FMV for a new asset worth $25,500 and $9,500 cash. If the exchange is nontaxable, compute Firm M's realized and recognized gain and tax basis in the new asset. How would your answers change if the new asset were worth only $14,000, and Firm M received $21,000 cash in the exchange?
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