1. A, B and C, all individuals, for X Corporation to engage in a manufacturing business. X issues 50 shares of common stock. A transfers $25,000 cash for 25 shares; B transfers inventory with a value of $10,000 and a basis of $5,000 for 10 shares; and C transfers unimproved land with a value of $20,000 and a basis of $25,000 for 20 shares.

(a) What are the tax consequences (gain or loss recognized, basis and holding period in the stock received) to each of the transferors?

(b) What are the tax consequences (gain recognized, basis and holding period in each of the assets received) to X Corporation?