Question: In a qualifying reorganization, Cato exchanges $1.2 million worth of stock and property valued at $500,000 ($245,000 basis) for all of Firestar's assets, which have

In a qualifying reorganization, Cato exchanges $1.2 million worth of stock and property valued at $500,000 ($245,000 basis) for all of Firestar's assets, which have a value of $1.7 million and a $350,000 basis. Firestar distributes the property received from Cato. The exchange meets the § 368 requirements.
a. What is Cato's recognized gain/loss from the reorganization?
b. What is Firestar's recognized gain/loss from the reorganization?

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