Ray owns 400 shares of stock in of Fisher Corporation. He had inherited 300 shares (estate tax value $15,000) seven months ago and had purchased 100 shares for $2,000 five months ago. Fisher completely liquidates, and Ray receives a building worth $50,000, that is subject to a mortgage of $38,000, in cancellation of his 400 shares.

a. What gain and/or loss does Ray recognize?

b. What is his basis in the building?