Several years ago, your client, Brooks Robertson, started an office cleaning service. His business was very successful, owing much to his legacy as the greatest defensive third baseman in major league history and his nickname, "The Human Vacuum Cleaner." Brooks operated his business as a sole proprietorship and used the cash method of accounting. Brooks was advised by his attorney that it is too risky to operate his business as a sole proprietorship and that he should incorporate to limit his liability. Brooks has come to you for advice on the tax implications of incorporation. His balance sheet is presented below. Under the terms of the incorporation, Brooks would transfer the assets to the corporation in return for 100 percent of the company's common stock. The corporation would also assume the company's liabilities (payables and mortgage).

Balance Sheet
	Adjusted tax basis	FMV
Assets
Accounts receivable	$ 0	$ 16,000
Cleaning equipment (net)	36,000	31,000
Building	72,000	86,000
Land	36,000	61,000
Total assets	$ 144,000	$ 194,000
Liabilities
Accounts payable	$ 0	$ 21,000
Salaries payable	0	16,000
Mortgage on land and building	46,000	46,000
Total liabilities	$ 46,000	$ 83,000

Required:

Answer the following questions:

How much gain or loss (on a per-asset basis) does Brooks realize on the transfer of each asset to the corporation?

How much, if any, gain or loss (on a per-asset basis) does Brooks recognize?

How much gain or loss, if any, must the corporation recognize on the receipt of the assets of the sole proprietorship in exchange for the corporation's stock?

What tax basis does Brooks have in the corporation's stock?

What is the corporation's adjusted tax basis in each asset it receives from Brooks?