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Subject: Business Tax Hosha exchanges all of her Leaf stock for Petal stock plus $5,000 cash. The exchange is pursuant to a tax-free reorganization. Hosha

Subject: Business Tax

Hosha exchanges all of her Leaf stock for Petal stock plus $5,000 cash. The exchange is pursuant to a tax-free reorganization. Hosha paid $25,000 for the Leaf stock five years ago. The Petal stock received by Hosha has an $18,000 fair market value. What is Hoshas realized and recognized gain/loss from the reorganization? Prepare your solution using spreadsheet software such as Microsoft Excel. What is Hoshas basis in the Petal stock she received?

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