Several years ago, your client, Brooks Robertson, started an office cleaning service. His business was very successful, owing much to his legacy as the greatest defensive third baseman in major league history and his nickname, "The Human Vacuum Cleaner." Brooks operated his business as a sole proprietorship and used the cash method of accounting. Brooks was advised by his attorney that it is too risky to operate his business as a sole proprietorship and that he should incorporate to limit his liability. Brooks has come to you for advice on the tax implications of incorporation. His balance sheet is presented below. Under the terms of the incorporation, Brooks would transfer the assets to the corporation in return for $100$ percent of the company's common stock. The corporation would also assume the company's liabilities $($payables and mortgage$).$

$\backslash$table$[[$Balance$,\backslash$table$[[$e Sheet$],[$Adjusted$]],$d tax basis,FMV$],[$Assets$],[$Accounts receivable,,$$0,$$$12,000$