Kowalski Corporation is interesting in acquiring Queenie Corporation because Queenie manufactures a product that is an essential part of Kowalski Corporation's manufacturing process. Kowalski will transfer its stock for all of Queenie's plants, equipment and inventory valued at $2,000,000 (adjusted basis $1,500,000) and $1,000,000 of liabilities associated with those assets.Kowalski plans on continuing to use Queenie's assets in its manufacturing process. Both Kowalski and Queenie have been in existence for more than ten years. Queenie will retain $50,000 cash and $100,000 of liquid assets to pay a product liability lawsuit. Once the lawsuit is resolve Queenie will liquidate. It is expected that this will occur within one year. Queenie has a deficit in AE&P of ($200,000). Queenie is solely owned by Tina Goldstein who has a basis in her stock of $375,000.

d)What is Kowalski's basis in the assets it receives from Queenie?