2018 Tax Year

Bill contributed business realty ($375,000 FMV and $113,000 adjusted basis) to Zeta Inc. in exchange for Zeta common stock. Immediately after the exchange, Bill owned 53% of Zetas outstanding stock. Compute gain recognized by Bill and Zeta Inc. on this exchange.

Select one:

a. Bill $0; Zeta $0

b. Bill $262,000; Zeta $0

c. Bill $262,000; Zeta $375,000

d. Bill $0; Zeta $375,000