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	$	8,000		$	8,000
Receivables		11,000			11,000
Building		90,000			45,000			45,000
Land		192,000			102,000			90,000
Total	$	301,000		$	166,000		$	135,000
Payables	$	15,000		$	15,000
Mortgage*		100,000			100,000
Total	$	115,000		$	115,000

* The mortgage is attached to the building and land.

Ernesto was asking for $420,000 for the company. His tax basis in the BLI stock was $130,000. Included in the sale price was an unrecognized customer list valued at $130,000. The unallocated portion of the purchase price ($104,000) will be recorded as goodwill.

Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $420,000.

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.)

Gain or loss recognized

Corporate-level tax