For each of the following corporate formations, (1) write the amount of gain or loss that will be recognized by

For each of the following corporate formations, (1) write the amount of gain or loss that will be recognized by the shareholders as a whole, and (2) write the corporation’s basis in the property after the transfer.

a. John and Kelly started Back Stop, Inc., in 2021. Kelly transferred a building with a basis of $120,000 and a FMV of $150,000 for 60% of the stock.
b. John agreed to operate the company on a day-to-day basis in exchange for his stock. Ignore any compensation income recognized by John.


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