There is no reporting of this type of transaction as a trade for tax purposes any more.

The old asset is reported as sold for $95,000. The New Asset is a new asset purchased for $120,000.

The instructions you are reading are correct.

There is an advantage in this for the taxpayer, as instead of having $25000 to reduce future income for SE tax purposes, you get $120,000 to reduce future SE income.  $95,000 x 15.3% savings is a pretty good deal.