$2-35$ Incorporating a Sole Proprietorship. Tom incorporates his sole proprietorship as Total

Corporation and transfers its assets to Total in exchange for all $100$ shares of Total com$-$mon stock and $$40,000$ worth of nonqualified preferred stock. The common stock has a

$$125,000$ FMV$.$ The assets transferred are as follows:

Assets

Adjusted

Basis FMV

Cash $ $5,000$ $ $5,000$

Equipment $$130,000$

Minus: Accumulated depreciation $(70,000)60,00090,000$

Building $$100,000$

Minus: Accumulated depreciation $(49,000)51,00040,000$

Land $24,00030,000$

Total $$140,000$ $$165,000$

a$.$ What are the amounts and character of Tom$$s recognized gains or losses?

b$.$ What is Tom$$s basis in the Total common and nonqualified preferred stock?

c$.$ What is Total $$s basis in the property received from Tom?