1. In December 2016, Angela sold 20 shares of Neely Co. stock for $8,000. This was qualified small business stock that she had bought in August 2010. Her basis is $2,000. What is her taxable gain?

2. Mr. Brown transferred property, which had an adjusted basis to him of $40,000 and a fair market value of $50,000, to Corporation B in exchange for 100% of Bs only class of stock and $15,000 cash. At the time of the transfer, the stock had a fair market value of $35,000. What is the amount of gain to be recognized by Mr. Brown?