Rod Clooney purchases Agnes Mitchell's sole proprietorship for $990,000 on August 15, 2015. The assets of the busniess are as follows:

Assets Agnes's Adjusted Basis FMV

Accounts Receivable $70,000 $70,000

Inventory 90,000 100,000

Equipment 150,000 160,000

Furniture and fixtures 95,000 130,000

Building 190,000 250,000

Land 25,000 75,000

Total $620,000 $785,000

Rod and Agnes agree that $50,000 of the purchase price is for Agnes's five-year covenant not to compete.

a. Calculate Agnes's realized and recognized gain.

b. Determine Rod's basis for each of the assets.

c. Write a letter to Rod informing him of the tax consequences of the purchase. His address is 300 Riverview Drive, Delaware, OH 43015