Pursuant to a corporate reorganization,

Marcia exchanged stock she owned in Casey

Corp. for stock in Mills Corp. valued at

$70,000, plus a Mills Corp. bond worth

$9,000 (face amount of $10,000). Marcia

had paid $71,000 for her stock in Casey 18

months ago.

a.

What is the amount and character of

Marcias recognized gain?

b.

What is Marcias basis for her Mills

Corp. bond?

c.

What is Marcias basis for her Mills

Corp. stock?