In 1996, Kobe acquired 100% of Spruce Corporation common stock by transferring property with an adjusted basis of $1,500,000 and fair market value of $4,200,000. Spruce is a qualified small business corporation. On April 1, 2015, Kobe sells all of the Spruce Corporation common stock for $16,300,000.

a.	What is the amount of gain that may be excluded from Kobe's gross income?
b.	What would your answer be if the fair market value of the Spruce stock were only $890,000 upon its issue?