Ron decided to incorporate his medical practice. He uses the cash method of Accounting. On the date of incorporation, the practice reports the following balance sheet:

Asset. Basis FMV

cash..................... $ 4500. $4500

A/c rec. 0 85,000

Equip( net 13k dep) 60,000 70,000

total........................$64,500 $159,500

Liabilities and Owner Equity

Current Liability 0 $60,000

note pay- Equip. 25,000. 25,000

Owner Equity. 39,500. 74,500

total. 64,500. 159,500

All the current liabilities would be deductible by Roan if he paid them. Roan transfers all the assets and liabilities to a professional corporation for all of its stock.

a)What are the amount and character of Ron recognized gain or loss?

b) What is Ron basis in the stock?

c) What is the corporation basis in the property?

d) Who recognizes income on the receivables upon collection? Can the corporation obtain a deduction on deductable for the liabilities when it pays them?