Ryan exchanged a car that he used in his business for the past 3 years for a new truck with a FMV of $25,000. This transaction took place at the end of the year. The adjusted basis of the car was $8,000 at the beginning of the year of disposition. Ryan paid $4,000 cash and assumed a note payable of $10,000 to be paid in $2,000 increments over the next 5 years. Ryan’s depreciation on the car for the year of disposition was $2,500. What is the gain (loss) recognized on the transaction?

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan