Rod Clooney purchases Kayla Mitchell's sole proprietorship for $990,000 on August 15, 2021. The assets of the business are: Asset Kayla's Adjusted Basis FMV Accounts receivable $70,000 90,000 Inventory Equipment 150,000 95,000 $70,000 100,000 160,000 130,000 250,000 Furniture and fixtures Building 190,000 Land 25,000 75,000 Total $620,000 $785,000 a. Calculate Kayla's realized and recognized gain. Kayla's realized on the sale is $ , and her recognized on the sale is $ gain loss b. Determine Rod's basis for each of the assets. The adjusted basis for accounts receivable is $ The adjusted basis for inventory is $ . The adjusted basis for equipment is $ The adjusted basis for furniture and fixtures is $ The adjusted basis for building is $ The adjusted basis for land is $ The adjusted basis for goodwill is $ c. Complete the letter to Rod informing him of the income tax consequences of the purchase. SWFT, LLP 5191 Natorp Boulevard Mason, OH 45040 August 20, 2021 Rod Clooney 300 Riverview Drive Delaware, OH 43015 Dear Mr. Clooney: This letter is in response to the inquiry regarding your proposed purchase of the assets of Kayla Mitchell's sole proprietorship. The $990,000 purchase price should be allocated among the assets to produce the following adjusted basis for each asset. Accounts receivable Inventory Equipment Furniture and fixtures Building Land Goodwill The goodwill represents the difference between the proposed purchase price and Under the tax law, goodwill is amortized on a straight-line basis over years. Form 8594 is filed with your 2021 tax return. If I can be of further assistance, please let me know. Sincerely, Jarvis Robins, CPA Tax Partner