A taxpayer created a small business corporation six years ago by exchanging property
(FMV=55,000; basis=75,000) in exchange for 100 shares representing 100 percent of the
corporation. The corporation struggles financially, and the taxpayer sells the stock for $20,000.
i. How much capital gain (loss) does the taxpayer recognize if the taxpayer does not elect
Sec. 362(e)?
ii. How much capital gain (loss) does the taxpayer recognize if the taxpayer elects Sec
362(e)?