1. Grady exchanges qualified property, basis of $23,000 and fair market value of $27,600, for 60% of the stock of Eadie Corporation. The other 40% of the stock is owned by Pedro, who acquired it five years ago.

   Calculate Grady's current income, gain, or loss and the basis he takes in his shares of Eadie stock as a result of this transaction.

   Because this transaction ______ the control of the corporation requirement, Grady has ____ of $____ and $_____ basis in his shares of stock.