Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (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 Tax Basis	Appreciation
Cash	$ 10,500	$ 10,500
Receivables	24,800	24,800
Building	125,600	62,800	62,800
Land	225,900	75,300	150,600
Total	$ 386,800	$ 173,400	$ 213,400
Payables	$ 20,000	$ 20,000
Mortgage*	178,500	178,500
Total	$ 198,500	$ 198,500

* The mortgage is attached to the building and land.

Ernesto was asking for $407,800 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 $118,000. The unallocated portion of the purchase price ($101,500) will be recorded as goodwill.

Note: Negative amounts should be indicated by a minus sign.

Required:

a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction?

b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a direct asset sale to Amy and Brian, and BLI distributes the after-tax proceeds [computed in part (a)] to Ernesto in liquidation of his stock?

Note: Round intermediate calculations and final answer to the nearest whole dollar amount.

c. What is the tax basis in the assets received by Amy and Brian?