Townsend, the sole shareholder of Pruett Corporation, has a $480,000 basis in his stock

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Townsend, the sole shareholder of Pruett Corporation, has a $480,000 basis in his stock. He exchanges his Pruett stock for $600,000 of Rogers Corporation voting common stock plus land with a fair market value of $100,000 and basis of $25,000. Pruett distributed the land to Townsend. This exchange qualifies under § 368.

1. What is Townsend’s recognized gain/loss from the reorganization? Prepare your solution using spreadsheet software such as Microsoft Excel.

2. What is the gain/loss recognized by Pruett Corporation and Rogers Corporation on the reorganization?

3. What is Townsend’s basis in the Rogers stock and the land received?