Mr. Zhao owns a sole proprietorship. The business assets have a $246,000 aggregate adjusted basis. According to an independent appraisal, the business is worth $400,000. Mr. Zhao transfers his business to ZJL Corporation in exchange for 1,000 shares of ZJL stock. Assume that Mrs. Ladd, who is Mr. Zhaos business colleague, transfers $200,000 cash to ZJL Corporation in exchange for 500 shares of ZJL stock. Mr. Zhao and Mrs. Ladds transfers occur on the same day and, after the exchange, ZJL has 1,500 shares of outstanding stock (1,000 owned by Mr. Zhao and 500 owned by Mrs. Ladd).

Required:

Compute Mr. Zhaos recognized gain on the exchange of assets for stock.

Reconnized gain is:???