Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows:

	FMV			Adjusted Basis			Appreciation
Cash	$	7,000		$	7,000
Receivables		11,000			11,000
Building		75,000			37,500			37,500
Land		168,000			68,000			100,000
Total	$	261,000		$	123,500		$	137,500
Payables	$	14,000		$	14,000
Mortgage*		94,000			94,000
Total	$	108,000		$	108,000

* The mortgage is attached to the building and land.

Ernesto was asking for $351,000 for the company. His tax basis in the BLI stock was $110,000. Included in the sales price was an unrecognized customer list valued at $110,000. The unallocated portion of the purchase price ($88,000) will be recorded as goodwill.

Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $351,000.

a) What amount of gain or loss does BLI recognize if the transaction is structured as a stock sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction, assuming a tax rate of 21 percent? (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)

b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian?