On January 7, 2021, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 Property 2 $300,000 $525,000 $375,000 $75,000 $400,000 Net built-in loss ($125,000) ($50,000) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 30% shareholder when the property is worth $350,000. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2021. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of $ basis of $ 300,000 . 475,000 . b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has a realized loss of $ 125,000 and a recognized loss of $ 75,000 X.