LO.2 Cole acquired 55% of Dane Corporation for $400,000 eight years ago. In the current year, Dane merges with Great Corporation, and Cole receives 7.5% of Great’s stock plus $300,000 in land. The Great stock received by Cole is valued at $900,000. At the time of the transaction, Dane’s E & P is $450,000, and Great’s E & P is $1.8 million. As an individual shareholder, how should Cole treat this transaction for tax purposes?