Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. In February of the current year, she incorporates her business as Dove Corporation and transfers the assets of the business to the corporation in return for all of the stock in addition to the corporation$$s assumption of her proprietorship$$s liabilities. All of the receivables and the unpaid trade payables are transferred to the newly formed corporation. The balance sheet of the corporation immediately after its formation is as follows: A table of Assets with value columns of Basis to Dove and Fair Market Value. Row one. Cash. Basis to Dove. $80,000$ dollars. Fair Market Value. $80,000$ dollars. Accounts receivable. Basis to Dove. $0$ dollars. Fair Market Value. $240,000$ dollars. Equipment. Cost $180,000$ dollars with depreciation previously claimed $60,000$ dollars. Basis to Dove. $120,000$ dollars. Fair Market Value. $320,000$ dollars. Building with straight$-$line depreciation. Basis to Dove. $160,000$ dollars. Fair Market Value. $400,000$ dollars. Land. Basis to Dove. $40,000$ dollars. Fair Market Value. $160,000$ dollars. Total Basis to Dove. $400,000$ dollars. Fair Market Value. $1,200,000$ dollars. A table of Liabilities and Stockholders$$ Equity with value columns of Name and values. Row one. Liabilities: Accounts payable$$trade$.120,000$ dollars. Liabilities: Notes payable$$bank$.360,000$ dollars. Stockholders$$ equity: Common stock. $720,000.$ Stockholders$$ equity. Total. $1,200,000$ dollars