A, B and C form a corporation transferring in the assets illustrated in a single transaction. The basis of the auto in the corporation was $5,000.

1. How much gain must A recognize if the liability is a business mortgge on the land?

2. What basis will A take in his 56 shares of stock?

3. How much gain must B recognize?

4. How much gain must X Corp. recognize?

5. What basis will X corporation take in the land that it receives from B?

Individual Equipment FMV $40,000 Basis 15,000 Inventory $10,000 20,000 Stock $20,000 5,000 -56 shares + $14,000 Auto Corporation Individual Land FMV $100,000 Basis 60,000 Liab. 85,000 Cash $5,000 5,000 20 shares Individual Services (FMV 20,000) + $4,000 cash 24 shares Individual Equipment FMV $40,000 Basis 15,000 Inventory $10,000 20,000 Stock $20,000 5,000 -56 shares + $14,000 Auto Corporation Individual Land FMV $100,000 Basis 60,000 Liab. 85,000 Cash $5,000 5,000 20 shares Individual Services (FMV 20,000) + $4,000 cash 24 shares