Ariel and Mia agree to combine their business assets to form the A&M corporation. Ariel's business assets are worth $135,000 and have a basis of $80,000. Mia's business assets are worth $200,000, have a basis of $165,000, and are encumbered by a $90,000 mortgage, which A&M will assume. Mia will also contribute $25,000 in cash to equalize their contributions.