Answer:
According to Section 1031 of Internal Revenue Code, an exchange of like-kind property is referred to as like-kind exchange, if the exchange meets the following criteria:
- The property should be exchanged only for the 'like-kind' (same class) property.
- The 'like-kind' property that is in exchange should be either used in operations of business or held for investment purposes.
- The exchange should be done under specific timing restrictions or requirements (for indirect exchanges through third parties).
Explanation:
A)	Explanation: Since both the properties in exchange are real properties which are used in business, this is a like-kind exchange
B)  
Description                           Amount ($)
Fair market value of bowling alley  	120,000
<u>Add: Mortgage value L is relieved off     40,000</u>
Amount reali7ed                      160,000
<u>Less: Adjusted basis             (175:000)
</u>
<u>Realized loss by L                      (15,000)
</u>
C)	Explanation: Since the loss realized is due to exchange, the loss is not recognized.
D)	Explanation: Since the loss is not recognized, the character of gain or loss could not be
E)	Explanation: The total of realized loss, $15,000 (From Requirement (b)) is deferred.
F)	Determine the basis of property acquired in exchange, bowling alley.
Description                         Amount ($)
Fair market value of bowling alley        120,000
<u>Add: Deferred loss                   15,000
</u>
<u>Basis of bowling alley                  135,000
</u>