Townsend, the sole shareholder of Pruett Corporation, has a $765,200 basis in his stock. He exchanges all of his Pruett stock for $956,500 of Rogers voting common stock plus land with a fair market value of $191,300 and basis of $47,825. Pruett distributed the land to Townsend. This exchange meets all Code requirements. If an amount is zero or there is no gain or loss, enter "o". a. What is Townsend's recognized gain/loss from the reorganization? Townsend recognizes a gain of $ 191,300 b. What is the gain/loss recognized by Pruett Corporation and Rogers Corporation on the reorganization? Rogers Corporation recognizes a gain of $ 382,600 X and Pruett Corporation recognizes no gain or loss of $ 0 . c. What is Townsend's basis in the Rogers stock and the land received? The basis in the Rogers stock is $ 1,147,800 X and the basis in the land is $ 191,300 . Feedback Check My Work The tax treatment for the parties involved in a tax-free reorganization almost parallels the treatment under the like-kind exchange provisions of $ 1031. In the simplest like-kind exchange, neither gain nor loss is recognized on the exchange of like-kind property. The general rule is that when an investor exchanges stock in one corporation for stock in another, the exchange is a taxable transaction. If the transaction qualifies as a reorganization under $ 368, the tax treatment, in substance, is similar to a nontaxable exchange of like-kind property