Baker, Cassie, Banner, and Miller are knowledgeable about pool design. They have decided to pool their knowledge and resources to form Rio Salado Enterprises Inc., a C corporation. They will provide professional services to area businesses and homeowners. All participants expect to work full time for Rio Salado Enterprises, and each expects to contribute sufficient assets to become a 25% shareholder with total stock equity of $50,000 each.

In addition to the skills that each brings to the new entity, the owners will contribute assets that will enhance the company's ability to provide quality technical design and planning services. These assets include a building, land, pool excavating equipment, office furniture, and cash for initial operating expenses.

The assets contributed by each shareholder, along with any related liabilities assumed by the corporation, are provided below.

Shareholder	FMV of noncash property contributed	Liability assumed by corporation	Basis in noncash property contributed	Cash Contributed	Cash paid to shareholder by corporation
Baker	121,000	61,000	100,000	0	10,000
Cassie	81,000	51,000	40,000	21,000	0
Banner	41,000	21,000	20,000	31,000	0
Miller	71,000	0	50,000	0	20,000

For the following two shareholders in Rio Salado Enterprises Inc., determine the gain realized, gain recognized, and tax basis of the shares using the data in the lesson. Enter the amount for each item in the associated cells below. If a response is zero, enter a zero.
	Gain Realized	Gain Recognized	Tax Basis in Shares
Baker
Banner