3. Laura organized Cannery Corporation (CC) 5 years ago by contributing equipment worth $2 million (basis of $450,000) for 2,500 shares of stock in CC, representing 100% of the stock in the corporation. Laura later (two years ago) gave two of her friends, Ama and Marge, 750 shares of stock in CC. In the current year, Laura transfers a building, worth $5,000,000 (basis of $1,500,000) to CC for 5,000 shares in the corporation.

1. What is Lauras realized gain, if any, on the transfer? _______________

2. What is her recognized gain, if any, on the transfer? _________________