On January 7, 2021, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under 5 351. 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 Property 1 Property 2 $590,600 $1,004,020 Value $708,720 or (Loss) $118,120 $767,780 ($236,240) ($118,120) Net built-in loss Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 35% shareholder when the property is worth $649,660. 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 basis of $ Martin's basis in Property 2 is a stepped down basis of s b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has a realized loss of s and a recognized loss of $