Ray owns 400 Shares of stock in Fly - by - Night Led . He had inherited 300 shares ( estate tax value $15, 000 ) seven months ago and had purchased 100 shares for $2, 000 five months ago . Fly- by - Night completely liquidates , and Ray receives a building worth $50 , 000 , that is subject to a mortgage of $38 , 000 , in cancellation of his 400 shares . a ) What gain and/ or loss does Ray recognize ? 6 ) What is his basis in the building ?"