Chi Corporation trades an asset with a book value of $20,000 for another asset with a fair market value of $15,000. The exchange is deemed to lack commercial substance. Chi s asset had a fair market value of $14,000. Chi paid $1,000 as boot. Compute Chi s recognized gain or loss on the exchange.
a) $5,000 loss
b) $6,000 loss
c) $1,000 gain
d) $5,000 realized but no loss is recognized