Armor Corporation exchanges $1 million of its common stock and $300,000 of Armor bonds for all of Trail Corporations outstanding stock. As part of the same transaction, Trail then merges into Armor, which receives assets having a $1.3 million FMV and an $875,000 adjusted basis. In the merger, Antonello, a Trail shareholder, exchanges his 20% interest in Trails single class of stock for $200,000 in Armor stock and $60,000 in Armor bonds. Antonellos 20% interest in Trail is comprised of 4,000 shares having a $100,000 adjusted basis. Following the reorganization, Antonello owns 5% (1,000 shares) of Armors stock. Armors E&P balance is $375,000.

a. What is the amount of Trails recognized gain or loss in the asset transfer?

b. What is Armors basis in the assets received in the exchange?

c. What are the amount and character of Antonellos recognized gain or loss?

d. What is Antonellos basis in the Armor stock? In the Armor bonds?