Pursuant to a Corporate reorganization, Marcia exchanged stock she owned in Cott Corp. for stock in Mills Corp . valaued at $70,000, plus a Mills Corp bond worth $9,000 (face amount of $10,000). Marcia paid $65,000 for her stock in Cott 18 months ago.
a) What is the amount and character of Marcia's recognized gain?
b) What is Marcia's basis for her Mill's Corp. bond?