Earl purchases all the assets and assumes the liabilities of Buddy€™s Market Shop. Details concerning the adjusted basis and fair market value of Buddy€™s assets and liabilities are as follows:

a. If Earl pays $250,000 for Buddy€™s net assets, what is Earl€™s basis in the assets purchased?
b. Assume that Buddy€™s Market Shop is a closely held corporation and that Earl pays $250,000 for all the stock. What is Earl€™s basis, and what is the basis of the assets of thecorporation?

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Adjusted Basis Fair Market Value $ 40,000 70,000 15,000 155,000 (60,000) Asset S 30,000 luvcutory Equipment Land Building Liabilities 22,000 10,000 118,000 (60,000)