E Tax Drill-Section 351 and Disallowance Rule On January 2, 2020, Martin Corporation acquires two properties from a shareholder in a transaction that qualifies under $351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are Property 1 Property 2 Net built-in loss Shareholder's Fair Market Value Basis $300,000 $375,000 Built in Gain or (Loss) $75,000 $525,000 $400,000 ($125,000) ($50,000) . Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 30% shareholder when the property is worth $350,000. a. Compute Martin's basis in Property 1 and in Property 2 as of January 2, 2020. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of s 383,800 X basis of s 575,700 X b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has a realized loss of a Fatback 153,520 X and a recognized loss of s 76,760 X. Check My Work