LO.6 Susan transfers property (basis of $50,000 and fair market value of $25,000) to Thrush Corporation in exchange for shares of § 1244 stock. (Assume that the transfer qualifies under § 351.)

a. What is the basis of the stock to Susan? (Susan and Thrush do not make an election to reduce her stock basis.)

b. What is the basis of the stock to Susan for purposes of § 1244?

c. If Susan sells the stock for $20,000 two years later, how will the loss be treated for tax purposes?