In a Sec. 351 exchange, Charlie transferred property with an adjusted basis of $125,250 and a fair market value (FMV) of $165,000 to a recently established corporation. In return, Charlie received stock valued at $95,000 and a short-term note with an FMV of $32,650.

Requirements

A - Based on the information provided, what is Charlie'srealizedgain?

B - Based on the information provided, what is Charlie'srecognizedgain?

C - Please explain the difference between realized vs recognized gain.