Don and Marie formed Paper Lilies Corporation on January 2. Don contributed cash of $400,000

in return for 50 percent of the corporation's stock. Marie contributed a building and land with the

following fair market values and tax-adjusted bases in return for 50 percent of the corporation's

stock.

FMV Adjusted basis

Building 180,000 120,000

Land 270,000 80,000

Total $450,000 $200,000

To equalize the exchange, Paper Lilies Corporation paid Marie $50,000 in addition to her stock.

a. What amount of gain or loss does Marie realize on the formation of the corporation?

b. What amount of gain or loss, if any, does she recognize?

c. What is Marie's tax basis in the stock she receives in return for her contribution of property to the corporation?

d. What adjusted basis does Paper Lilies Corporation take in the land and building received from Marie?