Cornell purchased a 15-year, $25,000 bond from Fulvous Corporation for $20,000 eight years ago. Interest of $2,300 has been amortized over the eight years and added to Cornell's bond basis. In the current year, Fulvous is acquired by Glaucous in a “Type A” reorganization. Cornell exchanges his Fulvous bond for a 7-year, $27,000 Glaucous bond.
Complete the statement below that outlines how Cornell should treat this exchange for income tax purposes.
Cornell has a $________ realized gain of which $_________ is recognized. His basis in the 7-year Glaucous bond is
$________.