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Rick transferred the following assets and liabilities to Warbler Corporation. ...

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Accounting

Rick transferred the following assets and liabilities to Warbler Corporation.

Adjusted Basis Fair Market Value
Building $210,000 $225,000
Equipment 45,000 75,000
Trucks 15,000 30,000
Mortgage (held for four years) on building 30,000 30,000

In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000).

a.Rick's basis in the stock of Warbler Corporation is $270,000.

b.Rick has a recognized gain of $75,000.

c.Rick has a recognized gain of $60,000.

d.Warbler Corporation has the same basis in the assets received as Rick does in the stock.

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