Maddie Pigere operates her business, MadPig Cleaning, as a sole proprietorship. Maddie has operated MadPig as a cash$-$basis sole proprietorship for $5$ years. However, she has decided to covert it to a corporation. Under the terms of the incorporation, Maddie will transfer the assets to the corporation in return for $100$ percent of the company$$s common stock $($fair market value $$258,600).$ The corporation will also assume the company$$s liabilities $($payables and mortgage$).$ The assets to be transfer to the corporation and liabilities to be assumed by the corporation are as follows:

Assets & Liabilities

Assets

Tax Basis

FMV

Supplies

$14,800$

$15,000$

Cleaning equipment $($net$)$

$137,100$

$139,800$

Building

$174,500$

$176,800$

Land

$39,400$

$41,200$

Total assets

$365,800$

$372,800$

Liabilities

Mortgage on building

$81,300$

Mortgage on land

$32,900$

Total liabilities

$114,200$

Please answer the following questions:

A$.$ How much gain or loss $($on a per$-$asset basis$)$ does Maddie realize on the transfer of each asset to the corporation?

B$.$ How much, if any, gain or loss $($on a per$-$asset basis$)$ does Maddie recognize?

C$.$ How much gain or loss, if any, must the corporation recognize on the receipt of the assets of the sole proprietorship in exchange for the corporation$$s stock?

D$.$ What tax basis does Maddie have in the corporation$$s stock?

E$.$ What is the corporation$$s adjusted tax basis in each asset it receives from Maddie?Maddie Pigere operates her business, MadPig Cleaning, as a sole proprietorship.

Maddie has operated MadPig as a cash$-$basis sole proprietorship for $5$ years. However,

she has decided to covert it to a corporation. Under the terms of the incorporation,

Maddie will transfer the assets to the corporation in return for $100$ percent of the

company's common stock $($fair market value $$258,600).$ The corporation will also

assume the company's liabilities $($payables and mortgage$).$ The assets to be transfer to

the corporation and liabilities to be assumed by the corporation are as follows:

Assets & Liabilities

Assets

Supplies

$14,800$

$137,100$

$139,800$

$($net$)$

Building

$176,800$

Land

$39,400$

$41,200$

Total assets

$365,800$

$372,800$

Liabilities

Mortgage on building

Mortgage on land

Total liabilities

Please answer the following questions:

A$.$ How much gain or loss $($on a per$-$asset basis$)$ does Maddie realize on the transfer

of each asset to the corporation?

B$.$ How much, if any, gain or loss $($on a per$-$asset basis$)$ does Maddie recognize?

C$.$ How much gain or loss, if any, must the corporation recognize on the receipt of the

assets of the sole proprietorship in exchange for the corporation's stock?

D$.$ What tax basis does Maddie have in the corporation's stock?

E$.$ What is the corporation's adjusted tax basis in each asset it receives from

Maddie?