Sarah and Bill get together to form a new corporation, Penut Inc. Sarah contributes a building that has a tax basis of $700,000 and a fair market value of $850,000 in exchange for 75% of the stock and $100,000 in cash. Bill contributes $250,000 cash for 25% of the stock. How much taxable gain does Sarah have in the transaction?

B. Same as above. What basis does Penut Inc. take in the building?

C. Same as above. What basis does Sarah take in the stock received?

D. Same as above. Immediately after the transaction, how much built-in gain (fair market value less basis) does Penut Inc. have in its assets? How does this compare with the total built-in gain that Sarah and Bill have in their stock?