Target Corporation has assets of $2 million (basis $1.6 million) and liabilities of $150,000. Target transfers all of its assets and liabilities to Acquiring Corporation. Target receives common stock worth $1.5 million and property worth $350,000 with a basis of $100,000 in the exchange. Target subsequently liquidates.

a) How much gain or loss, if any, must Target recognize?

b) How much gain or loss, if any, must Acquiring Corporation recognize?

c) Compute Acquiring Corporations basis for Targets assets.