Bob exchanges 4,000 shares of Beetle Corporation stock that he had purchased for $800,000 for 6,000 shares of Butterfly Corporation common stock with a fair market value of $1,000,000. What is Bob’s recognized gain on the exchange and his basis in the Butterfly stock? = Fair market value (Amount realized) of/in stock – Adjusted cost basis of/in stock
= Realized gain/loss (or capital gain/loss) of/in stock

= $1,000,000 - $800,000
= $200,000

Recognized Gain Adjusted cost basis
$0 $800,000

In the exchange of property exclusively for stock in another corporation, Beetle Corporation realizes a $200,000 gain ($1,000,000 amount realized - $800,000 adjusted cost basis (or basis, adjusted basis)). Because Beetle Corporation received no noncash boot property, however, it recognizes none of the gain or $0 gain or $0 capital gain.

What was done mathematically to get the $0.00 or $0 capital gain?