Spencer and Drew form Small Fry Fishing Corporation. Spencer transfers equipment with an accumulated basis of $70,000 and a fair market value of $60,000 for 50% of the stock worth $60,000. Drew transfers a patented manufacturing process with an adjusted basis of $10,000 and a fair market value of $60,000 for the remaining 50% of the corporations stock. (1) Calculate the amount of gain or loss that Spencer and Drew will have to recognize on this transaction and then (2) determine the basis that each has in the stock that they own.