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:

AssetBasisFair Market Value

Cash$ 50,000$ 50,000

Inventory10,00050,000

Building25,000250,000

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.