Butch forms World Serious Athletics, Inc

Butch forms World Serious Athletics, Inc. (WSA) by transferring assets he has owned for 10 years to WSA in exchange for all of its stock in a transaction that qualifies under Section 351. WSA will be a regional athletic clothing retailer. Butch transferred the following assets:

             Asset                          Basis                        Fair Market Value

           Cash                         $ 50,000                                $ 50,000

           Inventory           10,000                  50,000

           Building            25,000                 250,000

 The building is subject to a $100,000 mortgage. Since WSA will use the building in its operation, all asset transfers including the mortgage have a business purpose.

 As a result of the transactions above compute the following:

       A. Butch's gain or loss realized.

           B. Butch's gain or loss recognized.

           C. Butch's basis in his WSA stock.

           D. WSA's basis in its assets.

           E. What is Butch's holding period for his WSA stock.