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Problem 19-54 (LO 19-2) (Static)

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[The following information applies to the questions displayed below.] When incorporating Spotfree, a cleaning company, Jayne transferred accounts receivable (fair market value $20,000 and $0 tax basis) and $12,000 of accounts payable from her cash-method sole proprietorship to Spotfree in exchange for Spotfree stock valued at $8,000. Assume the transfer qualifies under 351. (Leave no answer blank. Enter zero if applicable.)

Problem 19-54 Part a (Static)

a. What is the amount and character of the gain Jayne must recognize on the exchange?

b. What is Jaynes basis in the Spotfree stock she received in the exchange?