Butch forms World Serious Athletics, Inc. $($WSA$)$ by transferring assets he has owned for $10$ years to WSA in exchange for all of its stock in a transaction that qualifies under Section $351.$ WSA will be a regional athletic clothing retailer. Butch transferred the following assets:

Asset Basis Fair Market Value

Cash $ $50,000$ $ $50,000$

Inventory $10,00050,000$

Building $25,000250,000$

The building is subject to a $$100,000$ mortgage. Since WSA will use the building in its operation, all asset transfers including the mortgage have a business purpose.

As a result of the transactions above compute the following:

A$.$ Butch's gain or loss realized.

B$.$ Butch's gain or loss recognized.

C$.$ Butch's basis in his WSA stock.

D$.$ WSA's basis in its assets.

E$.$ What is Butch$$s holding period for his WSA stock.

Show Your Work!